You are going to receive a €100,000 inheritance in ten years. If the prevailing interest rate is 6 percent, the present value of your inheritance is €55,839.48.

Question

Quizplus · Accepted Answer

The present value (PV) of a future sum of money can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value (€100,000), r is the interest rate (0.06), and n is the number of years (10). Plugging in these values gives a present value of approximately €55,839.48.

You Are Going to Receive a €100,000 Inheritance in Ten