A man stipulates in his will that $50000 from his estate is to be placed in a fund from which his three children are to each receive the same amount when they reach age 21. When the man dies (on January 2010), the children are aged 19, 15 and 13. The fund earns variable interest and the rates are as provided in the table below. How much will each child receive?

Question

Duration
01/01/09 to 31/12/12
Variable interest rate
12% p.a compounded semi-annually
Duration
01/01/13 to 31/12/25
Variable interest rate
10% p.a compounded annually

Answer 1

28086.40

Answer 2

The answer is $28418.78

Answer 3

282451.78