6. Your grandfather left an inheritance for you of $100,000. However you can only drawdown on the investment as follows: Years 1-3 $15,000 each year Year 4 to 6 $10,000 each year Year 7 $25,000 Interest on the fund is 5%. a) What is the present worth of this inheritance? b) Due to high liquidity interest rate have dropped to 4%. What will be the impact on the present worth of this inheritance as a consequence of the market change?

6. Your grandfather left an inheritance for you of $100,000. However you can only drawdown on the investment as follows: Years 1-3 $15,000 each year Year 4 to 6 $10,000 each year Year 7 $25,000 Interest on the fund is 5%. a) What is the present worth of this inheritance? b) Due to high liquidity interest rate have dropped to 4%. What will be the impact on the present worth of this inheritance as a consequence of the market change?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 10E

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