Business Finance
Math question help needed

Question Description

You will receive $80,000 inheritance in 8 years. You could invest that money today at 11% compounded semi-annually. What is the present value of inheritance?

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Final Answer

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FV= $80,000

t= 8 years

11%

compounded semiannually

r= 11/2 =5.5%

t= 8*2= 16 

PV= FV/{1+r)^n

PV= $80,000/ (1+0.055)^16

PV= 33,966.49

PV to the nearest cents is $33, 966.50

Please let me know if you need any clarification. I'm always happy to answer your questions.

Daniel W (303)
Cornell University

Anonymous
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