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

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Finance

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

If r=4%, how much should the fund pay each child next year?

Mr. Lucchesi is also thinking that his children need to learn tomake their own mark in the financial world. So he is thinking ofwithholding the trust fund payments until 5 years (i.e. t=5).Determine the perpetual annual payments that could be supported insuch a scenario.

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Luca Lucchesi has 10 million today and is setting up a trust fund for his 2 children If r4 how much should the fund pay each child next year We can assume a perpetual payment which is an equal amount of payment with periodic interval for indefinite time Present value of a    See Answer
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