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    Present Value of an Inheritance

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    Someone left in their will a sum of $5000 a yr forever with payments starting now. If the amount should grow at 5% per year and the interest rate is 12% what would the PV be? Please also show formula.

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    Suppose the present value is x dollars. After 1 year, it increases by 12%x since the annual rate is 12%. But ...

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    The present value of an inheritance is found. The solution is detailed and well presented. The response received a rating of "5" from the student who originally posted the question.