Janet Lopez wishes to establish a trust fund from which her son can withdraw $12,000 every six months for 20 years, when she reaches 21 years old. At the end of which time, she will receive the remaining money in the trust, which she would like to be $60,000. The trust will be invested at 8% per annum compounded semi-annually. How large should the trust be?

Janet Lopez wishes to establish a trust fund from which her son can withdraw $12,000 every six months for 20 years, when she reaches 21 years old. At the end of which time, she will receive the remaining money in the trust, which she would like to be $60,000. The trust will be invested at 8% per annum compounded semi-annually. How large should the trust be?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 6E

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