Your Uncle Left You an Inheritance in the Form of a Trust

question 78

Multiple Choice

Your uncle left you an inheritance in the form of a trust. The trust agreement states that you are to receive $750 each year, starting today and continuing for 25 years. What is the value of this inheritance today if the applicable discount rate is 5.8%?

• A) $9,772.46
• B) $9,989.82
• C) $10,339.26
• D) $10,623.33
• E) $11,004.28

---

Definitions:

Prices of Capital

The cost associated with obtaining capital goods, such as machinery and equipment used in production.

Prices of Labor

The wages or compensation provided to workers for their labor or services.

Isocost Line

A graph that shows all possible combinations of inputs that can be purchased with a given total cost.

Price of Capital

The cost of using capital resources, such as equipment or buildings, often reflected in interest rates or rental prices.