Question

1 points eBookPrintReferencesItem 7Item 7 1 points Your grandparents would like to establish a trust fund that will pay you and your heirs $180,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.5 percent, how much must your grandparents deposit today

Answer 1

$ 5,142,857.14

Step-by-step explanation:

Calculation for how much must your grandparents deposit today

Using this formula

Amount that grandparents must deposit today = Regular amount / Rate of interest

Let plug in the formula Amount that grandparents must deposit today= 180,000 / 0.035

=$ 5,142,857.14

Therefore the Amount that grandparents must deposit today will be $5,142,857.14