interest

an inheritance will be 20000. the interest rate for the the time value of money is 7%. How much is the inheritance worth now, if it will be received

a) in 5 years?
b)in 10 years?
c)in 20 years

I know i'm supposed to use F=P(1+i)^n
or P=F(1+i)^-n but I am not sure if the problem is asking me for the future value in 5 yrs or the present value of how much the money is worth now if the inheritance is given in 5,10,20 years.

And are all parts of the question independent. Or when I do partb), do I add the value I got in part a to it.

  1. 👍 0
  2. 👎 0
  3. 👁 402
  1. first one:
    PV = 20000(1.07)^-5
    = 14259.72

    you try the other two.

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. algebra

    A total of $12,000 is invested in two funds paying 9% and 11% simple interest. If the yearly interest is $1,180, how much of the $12,000 is invested at each rate? We have two unknowns: the amount of money invested at 9% and the

    asked by lin on October 6, 2012
  2. algebra

    Jacob deposits $60 into an investment account with an interest rate of 4%, compounded annually. The equation, y = 60(1 + 0.04)x, can be used to determine the number of years, x, it takes for Jacob's balance to reach a certain

    asked by christian stark on October 9, 2017
  3. algebra 2

    The amount of money in an account with continuously compounded interest is given by the formula A=Pe^rt , where P is the principal, r is the annual interest rate, and t is the time in years. Calculate to the nearest hundredth of a

    asked by David on May 27, 2011
  4. Maths

    Raj deposits $20000 in the bank that pays simple interest at the rate of 2.75% at anuum. If the interest rate decrease to x%. He will receive $50 less every year. Find the value of x?

    asked by Zain on May 14, 2019
  5. maths

    A sum of money becomes 8/5 of itself in 5 years at certain rate of simple interest. Find the rate of interest.

    asked by suneetha on September 14, 2014
  1. Math

    When Frederick was born, his grandparents gave hima a gift of $2000, which was invested at a simple interest rate of 5% per year. How much money will Frederick have when he can collect the monet at the age of 18? ( Assume no money

    asked by Trish Goal on November 20, 2014
  2. Macroeconomics

    Assume that the economy’s real GDP is growing. What will happen to money demand over time? If the Fed leaves the money supply unchanged, what will happen to the interest rate over time? If the Fed changes the money supply to

    asked by John on June 15, 2010
  3. Stats - Help!!!

    A U.S. government report stated that, “With bank interest rates around 1.0%, 8% of wage earners believe it worthwhile to keep money in a savings account. However, at 3.0% interest, 36% of wage earners believe it worthwhile to

    asked by Angela on April 13, 2016
  4. Math

    Mary B deposits $8500 into a savings account, compounded monthly at a nominal interest rate of 9 percent, as part of a savings plan that she would like to undertake in 5 years. 1) What is the effective interest rate per annum? 2)

    asked by Randi on April 30, 2011
  5. Maths

    What will become Rs 4630.50 in 1 and haif years ,if the rate of interest is 10% per annum compounded half yearly? At what rate per cent does compound interest on a sum of money becomes fourfold in 2 years?

    asked by Hussan on November 3, 2016
  6. math

    Suppose that $20000 is invested at 7% interest compounded annually. Find that amount of money in the account after 1 year? need it broken down in algebra

    asked by frank on September 3, 2012

You can view more similar questions or ask a new question.