Decides to arrange for his descendants to be well educated

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A rather wealthy man decides to arrange for his descendants to be well educated. He wants each child to have $60,000 for his or her education. He plans to setup a perpetual trust fund so that six children will receive this assistance in each generation. He estimated that generations will be spaced 25 years apart. He expects the trust to be able to obtain a 4% rate of return, and the first recipients to receive the money 10 years hence. How much money should he now set aside in the trust?

Reference no: EM13737813

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