1 answer

What is the present value of $500,000 inheritance (trust fund) to be received in 15 years...

Question:

What is the present value of $500,000 inheritance (trust fund) to be received in 15 years discounted at an annual rate of 12%?


Answers

Future Value = $500,000
Interest Rate = 12%
Time Period = 15 years

Present Value = Future Value / (1 + Interest Rate)^Time Period
Present Value = $500,000 / 1.12^15
Present Value = $500,000 / 5.47356576
Present Value = $91,348.13

So, present value of inheritance is $91,348.13

.

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