Your inheritance will pay you 100000 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?

Solution

Solution

Amount : 138750

Solution steps

Translate the problem into an equation:

A = 100000 (1 + 0.0775 \cdot 5)

100000 (1 + 0.0775 \cdot 5) = 138750

Amount : 138750

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