You receive an inheritance from your grandmother in the amount of $9 million. The inheritance will be paid in 3 equal installments and the first payment will arrive only in three years.

How much is the inheritance really worth to you today if the discount rate is 10%? How would your answer change if the inheritance would be paid in 9 equal installments? (Note: to receive a credit for this question you need to use shortcut formulas)

Answer rating: 100% (QA)

To calculate the present value of the inheritance we can use the present value formula for an annuit... View the full answer