15 Tom will receive an inheritance of 500000 3 years from no

15. Tom will receive an inheritance of $500,000 3 years from now. Tom\'s discount rate is 10$ compounded semiannually. Which of the following values is closest to the amount that Tom should accept today for the right to his inheritance? a. $373,108 b. $375,657 c. $665,500 d. $670,048 e. None of the above.

Correct option is > $373,108

PV = FV / (1+Rate/2)^(2xYears)

PV = 500000/(1+10%/2)^(2x3)

PV = $373,108

$15. Tom will receive an inheritance of $500,000 3 years from now. Tom\'s discount rate is 10$ compounded semiannually. Which of the following values is closest$

15 Tom will receive an inheritance of 500000 3 years from no

Solution

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