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Intermediate Accounting (Kieso)
Found in: Page 301

Short Answer

Question:Will Smith will receive $80,000 5 years from now, from a trust fund established by his father. Assuming the appropriate interest rate for discounting is 12% (compounded semiannually), what is the present value of this amount today?

The present value of the amount today is $44671

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1 Definition of the trust fund

Trust Fund is defined as the amount of money or property which someone owns after inheriting it from an ancestor but is kept invested for them.

Step 2 Calculation of present value of amount today

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