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18 March, 11:19

Eight years from now, you will be inheriting $100,000. what is this inheritance worth to you today if you can earn 7.25 percent interest, compounded annually?

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  1. 18 March, 13:58
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    Let the present worth = P

    P (1+0.075) ^8 = 1,00,000

    ⇒ 1.783478 P = 100000

    ⇒ P = 100000/1.783478

    ⇒ P = $56,070
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