Ten years from now, you will receive a generous inheritance in the amount of $65,000. The...
Ten years from now, you will receive a generous inheritance in the amount of $65,000. The inheritance currently sits in an investment account that earns 7.5% interest. How much is the inheritance worth right now, if it will be received in 10 years?
Solve the problem in EXCEL using an EXCEL spreadsheet function. Make sure to fill in your columns with information and use the appropriate Excel function to give the final answer.
Homework Answers
We need to find the present value of future cash flow, so we will use the PV function in Excel
| Future Value of inheritance | 65000 |
| Time | 10 |
| interest | 7.50% |
| Present value of inheritance | 31,537.61 |
Showing formula in excel
| Future Value of inheritance | 65000 |
| Time | 10 |
| interest | 0.075 |
| Present value of inheritance | =PV(U13,U12,,-U11) |
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