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    Present Value

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    Thorton will receive an inheritance of $500,000 three years from now. Thorton's discount rate is 10% interest rate compounded semiannually. Which of the following values is closest to the amount that Thorton should accept today for the right to his inheritance?

    $ 373,108.
    $ 375,657.
    $ 665,500.
    $ 670,048.
    None of the above is within $10 of the correct answer.

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    Solution Summary

    The solution explains how to calculate the present value