Calculate the average interest rate , Financial Management

At the end of 1922, your great grandfather (g.g.f.) established a trust fund to be used in order to help a later generation of the family obtain a university education. The ultimate beneficiary of the trust is required to draw the trust's balance in 36 equal monthly instalments starting at the beginning of the first year in which that person commences a three year university degree course.

Your g.g.f. saved $40 per year (inclusive of 1931) until the 1932 depression left him penniless and he stopped contributing to the fund. At the end of 1948, your grandfather reactivated the trust with a single deposit of $100 out of his World War 2 service gratuity. Unfortunately, your father missed out on a university education, but he decided at the beginning of 1977, to keep the trust going via instalments of $200 per annum starting at that time and continuing right up to the date on which the trust entitlement was first paid.

Assuming you were the beneficiary of the trust as from the beginning of 2005, how much would you be able to take under the terms of the trust? The average interest rate throughout the trust's duration is j1 = 6% p.a.

 

Posted Date: 2/22/2013 5:09:39 AM | Location : United States







Related Discussions:- Calculate the average interest rate , Assignment Help, Ask Question on Calculate the average interest rate , Get Answer, Expert's Help, Calculate the average interest rate Discussions

Write discussion on Calculate the average interest rate
Your posts are moderated
Related Questions
Q. Show the Transaction risk? This is the risk occur on short-term foreign currency transactions that the actual income or cost may be different from the income or cost expecte

Define and discuss indirect world systematic risk. The indirect world systematic risk can be illustrated as the covariance among a nontradable asset and the world market portfo

Q. Determine marginal tax rate? Ans. Henkel does not carry debt beyond five years. To determine the cost of debt: a. For Henkel AG, which Treasury rate at which maturit

discuss the applicability of the operational cycle in vegetable growing business in uganda

Q. What are the Motives of Holding Cash? Motives of Holding Cash: - In every business assets are kept for the reason that they generate profit. But cash is an asset which doesn

CLASSIFICATION OF BUDGETS Budgets can be categorized on the basis of several bases.  There are three important bases for classifying budgets.  They are - functions, time, and

Question : (a) The role of the Public Expenditure Management System (PEMS) is to allocate and use resources responsively, efficiently and effectively'. Briefly explain the abo

(a) The BEQ is 200 customers per month, i.e. $3,000 / ($20 - $5) (b) The margin of safety is 300 customers, i.e. 500 - 200 (c) Graph (d) New break-even is 334 customers, i

What is the role of investment banking in investment intermediaries? Investment banks: These banks assist corporations or governments into the issue of new debt or equity

How is international financial management different from domestic financial management? Answer:  There are three main dimensions that set separately international finance from