The parents of a disabled child are setting up a trust fund so that the child...

The parents of a disabled child are setting up a trust fund so that the child will have guaranteed income of $3000 per month when he turns 21 and they want him to be able to draw on this fund for 20 years. They started investing in the fund quarterly when the child was born and wanted to have it funded within 14 years. We'll assume their money is earning 5.5% interest, compounded quarterly both during the accumulation phase and the annuitization (withdrawing) phase. Hint: This problem requires solving 2 separate problems. Notice that one is quarterly and one is monthly. Round to the nearest cent. How much money will they need to deposit each quarter in order to allow their son to withdraw the desired amount at age 21?

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jeff jeffy answered 1 year ago

Time value of money A parent is setting up a trust fund for his daughter which...

Time value of money A parent is setting up a trust fund for his daughter which is expected to be worth GH¢200,000 in ten years when she is ready to marry. Given that the relevant discount rate is 12% per annum, what should be the onetime investment that this parent should make today to achieve his perceived target. Assume monthly compounding. The parent has the alternative of making ten annual contributions into the fund that will grow to GHS 200,000...

Luca Lucchesi has $10 million today and is setting up a trust fund for his 2...

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Proud parents wish to establish a college savings fund for their newly born child. Monthly deposits...

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1.A wealthy relative has set up a trust fund for you. In five years, you will...

1.A wealthy relative has set up a trust fund for you. In five years, you will receive the first of 300 monthly payments of $2500. You would like to have the money now to start a business. You visit Mr. Hammerhead, the loans officer, and he agrees to lend you money if you sign over all of your trust payments to the bank. How much would you receive if the bank charges interest at 6% compounded monthly?

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Is this child qualify as a qualifying relative or child on her parents tax return? Lauren...

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