Problemtommys grandparents have left him a trust fund that, Ask an Expert

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Tommy's grandparents have left him a trust fund that will pay him $9,000 a year for eighteen years once he turns twenty one, which is five years from today. Tommy would prefer to have the cash today for a new car, a new snowboard, a season's ski pass, and various other necessities of life. His uncle has offered to pay him a lump sum today in return for the rights to the trust fund payments. If Tommy can earn an average annual return of 11% on his money, what is the minimum amount he should expect to receive for the rights to the fund? Explain comprehensively and provide all workings and methods.

A. $69,315

B.45, 660

C. $51,100

D. $38,325

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146827

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