You Just Inherited a Trust That Will Pay You $100,000

question 75

Multiple Choice

You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for exactly four more years. Assuming an 8 percent annual interest rate, what is the value of this trust?

• A)$918,787
• B)$992,290
• C)$1,000,000
• D)$1,250,000

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Definitions:

Domestic Servants

Workers employed in households to perform various housekeeping duties, such as cleaning, cooking, and caregiving.

Sharecropping

A system of agriculture where a landowner allows a tenant to use the land in return for a share of the crops produced on the land.

African Americans

A term referring to citizens or residents of the United States who have origins in any of the black populations of Africa.

White Landowners

Historically, individuals of European descent who owned substantial agricultural lands, often in contexts involving racial and economic power dynamics.