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26 July, 05:00

Your inheritance will pay you $100,000 a year for five years beginning now. you can invest it in a cd that will pay 7.75 percent annually. what is the present value of your inheritance? (round to the nearest dollar.)

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  1. 26 July, 06:36
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    The present values of inheritance is $138750, because the inheritance is invested in CD that will pay 7.75 percent annually for five years. Therefore additional amount can be calculated as additional amount on Inheritance = (Principle value of inheritance 100000 * rate the CD will pay 7.75 * no of years 5) / 100 = $38750 Total Inheritance = principle inheritance 100000 + additional amount on inheritance 38750=$138750
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