Question

A person dies and leaves an estate of $1,000,000, which is invested and earns 6% per...

A person dies and leaves an estate of $1,000,000, which is invested and earns 6% per year. Three children, aged 7, 10, and 14, survive the person. At age 18, each child will receive an equal amount from the estate. What is the amount?

Math   Statistics-And-Probability   
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Answer #1

As currently the 3 children are aged 7, 10 and 14 respectively, therefore they would get that equal amount of money after 11, 8 and 4 years respectively. Therefore the present value of the three payments should be equal to 1,000,000. The equal payment here is computed as:

Therefore the equal amount that each child is to get at age of 18 here is computed to be:

$ 513, 797.08

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