What Is the Present Value of Your Trust Fund If

question 116

Multiple Choice

What is the present value of your trust fund if it promises to pay you $50,000 on your 30^th birthday (7 years from today) and earns 10 percent compounded annually?

• A)$25,000.00
• B)$25,657.91
• C)$28,223.70
• D)$29,411.76 PV =

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Definitions:

Forfeited Shares

Shares that are surrendered or taken back by a company from an investor because of the non-fulfillment of purchase conditions or agreements.

Reissue

The process of issuing again, such as reissuing shares or securities that have been bought back or cancelled.

Share Capital

The money that a company raises through the issue of shares, representing the capital invested by shareholders.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's earnings.