A company needs to set up a trust fund that will make payments (at the beginning of each quarter for the next fifteen years) to the native landowners of a mining site in a developing country. If it deposits $1816546 into the trust fund and the fund earns interest of 7.3% p.a.compounded quarterly, how much will the landowners receive each quarter?
(Give your answer to the nearest cent, omitting the dollar sign)
$1816546(1+0.073/4) 15*4 =5376647.015 as the amount of money earned by... View the full answer
- As the trust fund that will make payments at the beginning of each quarter for the next fifteen years, it should be an annuity due. I think the formual of annuity due is different from the fomula of regular annuity which you used above, right?
- Apr 01, 2018 at 5:15am
- but you know we are supposed to find the amount that the deposit will accumulate in 15 years making it a regular anniuty that's why that formula is used.then dividing by the number of payments made to obtain each payment amount
- Apr 01, 2018 at 5:21am