Trent and Doris Phillips have a new grandchild, William. They want to create a trust fund for him that will yield $280,000 on his 18th birthday. a) What lump sum would they have to deposit now at 5.4%, compounded continuously, to achieve $280,000? b) Trent and Doris decide instead to invest a constant money stream of R(t) dollars per year. Find R(t) such that the accumulated future value of the continuous money stream is $280,000, assuming an interest rate of 5.4%, compounded continuously. a) To achieve $280,000, they would have to deposit $. (Round to the nearest cent as needed.) b) To achieve $280,000, they would need a constant money stream of $ (Round to the nearest cent as needed.) per year.

Trent and Doris Phillips have a new grandchild, William. They want to create a trust fund for him that will yield $280,000 on his 18th birthday. a) What lump sum would they have to deposit now at 5.4%, compounded continuously, to achieve $280,000? b) Trent and Doris decide instead to invest a constant money stream of R(t) dollars per year. Find R(t) such that the accumulated future value of the continuous money stream is $280,000, assuming an interest rate of 5.4%, compounded continuously. a) To achieve $280,000, they would have to deposit $. (Round to the nearest cent as needed.) b) To achieve $280,000, they would need a constant money stream of $ (Round to the nearest cent as needed.) per year.

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 10E

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