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?
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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