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Present value of a $250,000 inheritance

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?

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.

$2.19