A trust fund is to be established by a single payment so that at the end of 15 years,there will be $20,000 in the fund.If the fund earns interest at the rate of 8% compounded semiannually,how much should be deposited initially into the fund?
A) $6166.38
B) $6472.42
C) $7014.27
D) $7143.56
E) $11,105.30

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of $20,000 in 15 years at 8% compounded semiannually is $6166.38.

A Trust Fund Is to Be Established by a Single