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You will receive a ​$90,000 inheritance in 55 years. You could invest that money today at...

You will receive a ​$90,000 inheritance in 55 years. You could invest that money today at 88​% compounded semi dash annually semi-annually. What is the present value of your​ inheritance?

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Answer #1

Information provided:

Future value= $90,000

Time= 5 years*2= 10 semi-annual periods

Interest rate= 8%/2= 4% per semi-annual period

The present value is calculated by entering the below in a financial calculator:

FV= 90,000

N= 10

I/Y= 4

Press the CPT key and PV to compute the present value.

The value obtained is 60,800.78.

Therefore, the present value of the inheritance is $60,800.78.

In case of any query, kindly comment on the solution.

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