A university is offering a charitable gift program. A former student who is now 50 years old is consider the following offer: The student can invest exist7, 600,00 today and then will be paid a 9.00% APR return starting on his 65th birthday (i.e. For a exist10,000 investment a 9% rate would mean exist900 per year). The pr gram will pay the cash flow for this investment while you are still alive. You antipasti living 25.00 more years at or your 65th birthday. The former student wants return of 7.00% on his investments, but would like to consider the opportunity.
Using the student's desired return, what is the value of this deferred annually today on his 50th birthday?