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How much do you need to put in a trust today

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Question - You are interested in buying a house for your parents. You want to keep the house in your family forever and therefore want to set aside money today for all the future maintenance issues. Since it's a new house, you don't think anything will really go wrong for the next 10 years. You then estimate 11 years from today you'll have to set aside $8,000. This amount will grow by 3% per year forever.

If your discount rate is 8%, how much do you need to put in a trust today to pay for all future maintenance?

Reference no: EM133172999

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