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Present Value

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.

Solution Summary

The solution explains how to calculate the present value