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A wealthy parent is trying to fund a trust fund for his oldest son. The parent...

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Finance

A wealthy parent is trying to fund a trust fund for his oldestson. The parent has set aside $460,300.00 today in an account thatpays 7.00% annual interest. His oldest son will begin receiving thetrust in 14.00 years, and the trust is set up to pay 16.00identical annual payments. What will be the yearly withdrawal forthe son from the trust?

Answer Format: Currency: Round to: 2 decimalplaces.

Answer & Explanation Solved by verified expert
4.4 Ratings (617 Votes)
First we will calculate the value of the trust after 14 years when the son will start receiving the annual payments We will use the following formula to calculte this value FV PV 1 rn whereFV Future value of    See Answer
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Transcribed Image Text

A wealthy parent is trying to fund a trust fund for his oldestson. The parent has set aside $460,300.00 today in an account thatpays 7.00% annual interest. His oldest son will begin receiving thetrust in 14.00 years, and the trust is set up to pay 16.00identical annual payments. What will be the yearly withdrawal forthe son from the trust?Answer Format: Currency: Round to: 2 decimalplaces.

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