How much money is needed to establish a fund paying $80,000 annually forever with the first...

How much money is needed to establish a fund paying $80,000 annually forever with the first payment made immediately if the fund will earn interest at 5% p.a. compounded weekly?

Solutions

Expert Solution

EAR = (1 + 0.05/52)⁵² - 1 = 5.1246%

Value of Fund = 80,000 + 80,000/0.051246

Value of Fund = $1,641,097.45

jeff jeffy answered 2 years ago

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