Your grandfather has left you $150,000 in a trust fund that you cannot have for another seven years.You have decided that you really need this money now to pay for your college expenses.Your attorney offers you $80,000 for an assignment of the proceeds of the trust.If you can get a student loan at 10%,should you accept your attorney's offer?
A) No, because the $150,000 is worth more than $80,000 today.
B) No, because the $150,000 is worth less than $80,000 today.
C) Yes, because the $150,000 is worth more than $80,000 today.
D) Yes, because the $150,000 is worth less than $80,000 today.

Question

Quizplus · Accepted Answer

PV = 11ea7fdb_fc2b_ddf5_a768_b7d0d9c5cfb2_TB2902_00 PV = 11ea7fdb_fc2b_ddf6_a768_830ce8508379_TB2902_00 = $76,973.72
Using a financial calculator:
N = 7, I/Y = 7, PMT = 0, FV = -150,000, cpt PV = $76,973.72

Your Grandfather Has Left You $150,000 in a Trust Fund