When Derek was a small child, his grandfather established a trust fund for him t

ID: 2816391 • Letter: W

Question

When Derek was a small child, his grandfather established a trust fund for him to receive

$19 comma 000

on his thirty-fifth birthday. Derek just turned 23. What is the value of his trust today if the trust fund earns

percent interest? If he had to wait until age 40 to receive the money, what is the present value today of the

$19 comma 000

to be received in 17 years? Click the following table icon to view the PVIF table

The present value,

PV,

of his trust today if the trust fund earns

percent interest is

$nothing

(Round to the nearest cent.)

The present value,

PV,

if he had to wait until age 40 to receive the money is

$nothing

(Round to the nearest cent.)

Value of Fund = $19,000
Annual Interest Rate = 3%

If trust fund is received on 35th birthday:

Present Value = $19,000 * PVIF(3%, 12)
Present Value = $19,000 * 0.70138
Present Value = $13,326.22

If trust fund is received on 40th birthday:

Present Value = $19,000 * PVIF(3%, 17)
Present Value = $19,000 * 0.60502
Present Value = $11,495.38

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