What Is the Present Value of Your Trust Fund If

question 26

Multiple Choice

What is the present value of your trust fund if you have projected that it will provide you with $50,000 on your 30^th birthday (7 years from today) and it earns 10% compounded annually?

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

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Definitions:

Withdrawal

The act of removing funds from an account, or the act of taking out resources or assets from a business by an owner for personal use.

Capital

The wealth, either financial or physical, that is used by a business to produce goods or services.

Income Summary

An account in which the revenues and expenses are temporarily recorded to calculate the net income or loss for a period, before transferring to the capital account.

Capital

Refers to the financial assets or resources that individuals or businesses have available to invest or spend on building and growing their operations.