You have received a trust fund currently worth $900,000. However, you cannot access to the fund...

You have received a trust fund currently worth $900,000. However, you cannot access to the fund until you turn 60 years old, which is in 20 years. At that time you will be able to withdraw $10,000 per month. If the trust fund is invested at a 7 percent rate, compounded monthly, how many months will the money last once you start making the monthly withdrawals? **Answer and show work in Excel

Expert Solution

Interest Rate = 7% Per Annum

monthly Interest rate = (1+7%)^(1/12)-1
= 0.565%

Thus we can calculate now the final amount = $900,000 ((1+0.565%)^(240))
= $3,479,272.264

Thus if monthly withdrawal = $10,000, the fund will last for 346 months = 28 Years and 10 Months.

This is considering the fact that money does not grow after Final amount is reached at 60,

jeff jeffy answered 2 years ago

Your client has been given a trust fund valued at $1.18 million. He cannot access the...

Your client has been given a trust fund valued at $1.18 million. He cannot access the money until he turns 65 years old, which is in 25 years. At that time, he can withdraw $21,000 per month. If the trust fund is invested at a 4.5 percent rate, compounded monthly, how many months will it last your client once he starts to withdraw the money? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Number...

what is the present value of your trust fund if you have projected that it will...

what is the present value of your trust fund if you have projected that it will provide you with $50,000 9 years from today and it earns 7% compounded annually?

Q2. It is your 6th birthday today. You have a trust fund with $50,000 that is...

Q2. It is your 6th birthday today. You have a trust fund with $50,000 that is earning 8% per year. You expect to withdraw $30,000 per year for 7 years starting on your 22nd birthday for graduate school. How much money will be left in the trust fund after your last withdrawal (rounded to the nearest $10)?

13. our brother, who is 6 years old, just received a trust fund that will be...

13. our brother, who is 6 years old, just received a trust fund that will be worth $25,000 when he is 21 years old. If the fund earns 10 percent interest compounded annually, what is the value of the fund today? Group of answer choices $104,602 $6,575 $5,975 $6,875 14. You deposited $2,000 seven years ago and haven’t touched the account since. Now you have $3,656 in the bank. What was the interest rate? Group of answer choices 6% 7%...

You receive an inheritance of $100,000. However the terms of the bequest specify that you cannot...

You receive an inheritance of $100,000. However the terms of the bequest specify that you cannot take possession of the cash until the sum has grown to $250,000. The money is being held in trust for you in an account that is currently paying 10%, compounded quarterly. The bank where the account is held guarantees the rate is fixed for the first five years, but thereafter may increase, but will not decrease. If the interest rate increases, the increase will not be more...

You are the beneficiary of a trust fund that will start paying you cash flows in...

You are the beneficiary of a trust fund that will start paying you cash flows in 5 years. The cash flows will be $ 19933 per year and there will be a total of 35 yearly cash flows paid. If the interest rate is 5.5 % per year, what is the value needed in the trust fund now to fund these cash flows?

As the manager of a large pension fund you have just received $10 million in additional...

As the manager of a large pension fund you have just received $10 million in additional contributions to invest. Currently the S&P 500 is at 275. The six-month futures contract on the index is at 285. The six-month T-bill rate is 8 percent per year, and the dividend yield on the index is 3 percent per year. If you wish to commit $10 million to the market are you better off doing it directly by purchasing the securities that make...

You have just been offered a contract worth $1.15 million per year for 6 years. However,...

You have just been offered a contract worth $1.15 million per year for 6 years. However, to take the contract, you will need to purchase some new equipment. Your discount rate for this project is 11.5 %. You are still negotiating the purchase price of the equipment. What is the most you can pay for the equipment and still have a positive NPV? The most you can pay for the equipment and achieve the 11.5 % annual return is $___...

EMH says that you cannot make a return that will consistently beat the market. However, there...

EMH says that you cannot make a return that will consistently beat the market. However, there are behavioural and institutional reasons why that may not be the case. You should try to identify a few of those so that you can justify your attempt to beat the market. This is not a passive strategy, you are seeking out stocks to buy and stocks to sell. Walmart beating the Market and Target beating the market. Is the market value fair? What...

EMH says that you cannot make a return that will consistently beat the market. however, there...

EMH says that you cannot make a return that will consistently beat the market. however, there are behavioral and institutional reasons why that may not bethe case. by using efficient market hypothesis, how can Walmart beat the market by inefficiency? and how can Target Corp beat the market by inefficiency? identify few strategies of emh theory so you can justify your attempt to beat the market. this is not a passive strategy, you are seeking stocks to buy and stocks...

Question