Becky Wilkinson Wants to Establish a Trust Fund That Will

question 245

Short Answer

Becky Wilkinson wants to establish a trust fund that will provide her children and heirs with a perpetual annuity in the amount of thousand dollars per year beginning next year.If the trust fund will earn an interest rate of 10% per year compounded continuously, find the amount that she must place in the trust fund now.
Hint: Use the formula .
$ __________ thousand dollars.

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Definitions:

Proportional Tax

A tax system where the rate of tax is constant regardless of the amount subject to tax, meaning everyone pays the same percentage of their income.

Local Tax

Taxes imposed by local government entities, such as cities or counties, typically used to fund local services like schools, roads, and public safety.

Business Property

Assets owned by a business, including physical property like real estate and equipment, as well as intangible assets like intellectual property.

Benefits-Received Principle

A theory in taxation that believes individuals should be taxed based on the level of government services they consume.