Question

In: Finance

Robert wishes to leave a provision in her will that $7000 will be paid annually in...

Robert wishes to leave a provision in her will that $7000 will be paid annually in perpetuity to a local charity. How much must she provide in her will for this perpetuity if the interest rate is 6%?

Select one:

$116,667

$70,000

$58,334

$93,334

Solutions

Expert Solution

The amount is computed as shown below:

= Amount paid annually / Interest rate

= $ 7000 / 6%

= $ 116,667


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