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A wealthy businessman left an estate of $2,500,000 to his 3 surviving children. The children are to receive annual annuity payments in the ratio of 3:2:1 for 30 years. If the estate earns 8% compounded annually, what are the annuity payments of the 3 surviving children? Thanks for help.

Guest Feb 23, 2017
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 #1
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According to annuity calculator at 

http://www.calculator.net/annuity-payout-calculator.html?cstartingprinciple=2500000&cinterestrate=8&cinflationrate=0&cyearstopayout=30&camounttopayout=5000&cpayfrequency=annually&ctype=fixlength&x=55&y=4

 

payout would be 222,268.58 annually

divided amongst the three

3/6 = $ 111134.29   annually

2/6 =    74,089.53

1/6=     37,044.76

ElectricPavlov  Feb 23, 2017
 #2
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Hello EP: A slight mistake in copying the payment. The total payment is 222,068.58 instead of 222,268.58 that you used. The allocated payments, therefore, are:

$37,011.43

$74,022.86

$111,034.29

Guest Feb 23, 2017

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