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The problem is asking to find the present value (PV) of a trust fund, which will be worth $18,000 when Aroon turns 40 (17 years from now) and earns an interest rate of 7% per year. We can use the present value formula:

\[
PV = \frac{FV}{(1 + r)^n}
\]

Where:
- $ PV $ is the present value (what we need to find).
- $ FV = 18,000 $ is the future value.
- $ r = 0.07 $ is the annual interest rate (7%).
- $ n = 17 $ is the number of years.

Now, let's calculate the present value:

\[
PV = \frac{18,000}{(1 + 0.07)^{17}} = \frac{18,000}{(1.07)^{17}}
\]

I will calculate this for you.The present value (PV) of Aroon's trust fund, if the trust earns 7% interest, is approximately **$5,698.34**.

Would you like further explanation on any part of the calculation?

Here are 5 related questions you might find useful:
1. What is the impact of a different interest rate on the present value?
2. How would the present value change if the time period was longer?
3. What if Aroon received a different future amount, say $25,000? How would that affect the PV?
4. Can the formula be applied if the interest rate was compounded monthly instead of annually?
5. How would inflation affect the real value of this $18,000 in 17 years?

**Tip:** The higher the interest rate or the longer the time period, the lower the present value will be.

When Aroon was a small child, his grandfather established a trust fund for him to receive $18,000 on his 35th birthday. Aroon just turned 23. What is the value of his trust today if the trust fund earns 7 percent interest? If he had to wait until age 40 to receive the money, what is the present value today of the $18,000 to be received in 17 years?

Calculate the present value of a trust fund worth $18,000 to be received in 17 years with an interest rate of 7%. This financial math problem covers the present value formula and the concept of the time value of money, suitable for high school students.

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