When Derek was a small child, his grandfather established a trust fund for him to receive...
When Derek was a small child, his grandfather established a trust fund for him to receive $18,000 on his 35th birthday. Derek just turned 23. What is the value of his trust today if the trust fund earns 6% interest? If he had to wait until age 40 to receive the money, what is the present value today of the $18,000 to be received in 17 years? The present value of his trust today if the trust fund earns 6% interest is ____$
Homework Answers
| Future value = present value*(1+ rate)^time |
| 18000 = Present value*(1+0.06)^12 |
| Present value = 8945.45 |
| Future value = present value*(1+ rate)^time |
| 18000 = Present value*(1+0.06)^17 |
| Present value = 6684.56 |
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When Derek was a small child, his grandfather established a
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Larry mattingly
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Steve and Ed are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve onhis 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate'sFIN 534 – Homework Chapter 4©2011 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary informationand may not be copied, further distributed, or otherwise disclosed in whole or...
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