Zayden will receive an inheritance of R850 000 four years from now. His discount rate is a 9,2% interest rate,compounded semi-annually. Which of the following values is closest to the amount that he should accepttoday for the right to his inheritance?

Step 1:We use the formula:A=P(1+r/2)^2nwhereA=future valueP=present valuer=rate of interestn=time…

Answered: Zayden will receive an inheritance of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Zayden will receive an inheritance of R850 000 four years from now. His discount rate is a 9,2% interest rate, compounded semi-annually. Which of the following values is closest to the amount that he should accept today for the right to his inheritance?