Linda O’Shay deposited $50,000 in a savings account as a perpetual trust. She believes the account will earn 8% annual interest during the first 10 years and 4% interest thereafter. The trust is to provide a uniform end-of-year scholarship at the university. What uniform amount could be used for the student scholarship each year, beginning at the end of the first year and continuing forever?
Linda O’Shay deposited $50,000 in a savings account as a perpetual trust. She believes the account will earn 8% annual interest during the first 10 years and 4% interest thereafter. The trust is to provide a uniform end-of-year scholarship at the university. What uniform amount could be used for the student scholarship each year, beginning at the end of the first year and continuing forever?
Chapter17: Retirement And Estate Planning
Section: Chapter Questions
Problem 5DTM
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Linda O’Shay deposited $50,000 in a savings account as a perpetual trust. She believes the account will earn 8% annual interest during the first 10 years and 4% interest thereafter. The trust is to provide a uniform end-of-year scholarship at the university. What uniform amount could be used for the student scholarship each year, beginning at the end of the first year and continuing forever?
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