You have been awarded an insurance settlement of $250,000 that is payable one year from today....

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Question

You have been awarded an insurance settlement of $250,000 that is payable one year from today....

You have been awarded an insurance settlement of $250,000 that is payable one year from today. What is the minimum amount you should accept today in exchange for this settlement if you can earn 6.7 percent on your investments?

Select one:

A. $250,000.00

B. $232,866.67

C. $238,079.19

D. $242,408.19

E. $234,301.78

business finance

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Answer 1

Answer #1

$250,000 is the amount that is receivable one year into the future, hence this is our future value

We have to calculate the present value of such money, this can be done using the function:

=PV(6.7%,1,0,250000)

=234,301.78

The answer is E. $234,301.78

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Answer 2

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You have been awarded an insurance settlement of $250,000 that is payable one year from today....

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