Suppose your grandmother dies and leaves you $100,000 but it will be held (without interest accruing)for another two years. You are trying to figure out how much you can borrow now so that when you get the money it can be paid off with this $100,000. What concept would you use?

Question

Quizplus · Accepted Answer

To determine how much can be borrowed now, given the future amount of $100,000, we need to use the concept of present value. Present value helps to calculate the current value of future cash flows.

Suppose Your Grandmother Dies and Leaves You $100,000 but It