Question

Carl is the beneficiary of a $29,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 7-year period in equal installments at the end of each year. If the fund earns interest at the rate of 4%/year compounded annually, what amount will he receive each year?

Answer 1

Answer:

$8,939.58

Step-by-step explanation:

Let x represent the amount to be received each year

==> x * Present value annuity factor (4%,7yrs) = $29,000

==> x * 3.240 = $29,000

==> x = $29,000/3.244

x = 8939.580764488286

x = $8,939.58

So, $8,939.58 is the amount he will receive each year.