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?© BrainMass Inc. brainmass.com June 3, 2020, 9:22 pm ad1c9bdddf
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 = ...
The solution calculates the Present value of a $250,000 inheritance.