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Your Great-Aunt Left You an Inheritance in the Form of a Trust

question 133

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Your great-aunt left you an inheritance in the form of a trust. The trust agreement states that you are to receive $2,500 on the first day of each year,starting immediately and continuing for fifty years. What is the value of this inheritance today if the applicable discount rate is 6.35%?


Definitions:

Lipids

A broad group of naturally occurring molecules that include fats, waxes, sterols, fat-soluble vitamins, and others, characterized by their solubility in nonpolar solvents.

Oils

Organic compounds that are liquid at room temperature, often used for cooking, lubrication, and as biofuel.

Fats

Organic compounds consisting of triglycerides that are solid at room temperature, used as a major energy store in animals.

Triglyceride

A type of fat (lipid) found in your blood, formed from a single molecule of glycerol and three fatty acids.

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