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    Present value of a $250,000 inheritance

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    You expect to receive an inheritance of $250,000 in 5 years. You could invest that money today at 8% compounded semi-annually. What is the present value of the inheritance?

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    Solution Preview

    We have to discount the inheritance amount to arrive at the present value.
    We discount by dividing the future value (in this case $250,000) by (1+r)^n
    where r = ...

    Solution Summary

    The solution calculates the Present value of a $250,000 inheritance.