What is the present value of $500,000 inheritance (trust fund) to be received in 15 years...
What is the present value of $500,000 inheritance (trust fund) to be received in 15 years discounted at an annual rate of 12%?
Homework Answers
Future Value = $500,000
Interest Rate = 12%
Time Period = 15 years
Present Value = Future Value / (1 + Interest Rate)^Time
Period
Present Value = $500,000 / 1.12^15
Present Value = $500,000 / 5.47356576
Present Value = $91,348.13
So, present value of inheritance is $91,348.13
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