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A Trust Has Been Established to Fund Scholarships in Perpetuity

Question 22

Multiple Choice

A trust has been established to fund scholarships in perpetuity.The next annual distribution will be $1,200 and future payments will increase by 3 percent per year.What is the value of this trust at a discount rate of 7.4 percent?


A) $17,189.19
B) $19,960.00
C) $27,272.73
D) $24,609.11
E) $30,388.18

Correct Answer:

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