Mark Nelson turned 20 years old today. His grandfather established a trust fund that will pay Mr. Nelson \($50,000\) on his next birthday. However, Mr. Nelson needs money today to start his college education. His father is willing to help and has agreed to give Mr. Nelson the present value of the future cash inflow, assuming a 10 percent rate of return.

Required

a. Use a present value table to determine the amount of cash that Mr. Nelson’s father should give him.

b. Use an algebraic formula to prove that the present value of the trust fund (the amount of cash com¬ puted in Requirement

a) is equal to its \($50,000\) future value.