Your grandfather left an inheritance for you of $100,00. However you can only drawdown on the investment as follows: years 1 - 3 $15,000 each year Years 4 - 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
Your grandfather left an inheritance for you of $100,00. However you can only drawdown on the investment as follows: years 1 - 3 $15,000 each year Years 4 - 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
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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Question
Your grandfather left an inheritance for you of $100,00. However you can only drawdown on the investment as follows:
years 1 - 3 $15,000 each year
Years 4 - 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?
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