inowalst
  • inowalst
You will receive an inheritance of $500,000 in 20 years on your 40th birthday. What is the value of the inheritance today if the discount rate is 10%?
Finance
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SOLVED
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chestercat
  • chestercat
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inowalst
  • inowalst
@SolomonZelman @dan815 @TheSmartOne
dan815
  • dan815
okay so umm im not too sure what discount rate is exactly if u can explain that
inowalst
  • inowalst
xD I'm not too sure, either. I started Finance like a week ago and it's been kinda hard.

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More answers

dan815
  • dan815
okay so that discount rate is like a compound interest thing basically
inowalst
  • inowalst
@Serenity74
Serenity74
  • Serenity74
Wouldn't it be 10% - the total amount since it's asking for TODAY???
Serenity74
  • Serenity74
it;s DISCOUNT RATE
dan815
  • dan815
http://prntscr.com/9dwfoo
inowalst
  • inowalst
I'll try that. Hold on.
dan815
  • dan815
now you start * with some account x and you end up with 500,000 so starting with what u should get now so that its equal to that while applying a 10% compound rate x*(1+10%)^20 = 500,000
Serenity74
  • Serenity74
wait Dan is right
inowalst
  • inowalst
Of course he is. He's Dan.
dan815
  • dan815
loool
Serenity74
  • Serenity74
Dats da the thing he is Dan not the man :p @dan815
inowalst
  • inowalst
@dan815 Can you help me with like.. 2 more? Also, Dan's the man, too. c:
dan815
  • dan815
omg pls delete these comments i feel embarassed
dan815
  • dan815
xD
inowalst
  • inowalst
xD It's fiiine.
dan815
  • dan815
okay lemme see these other questions
dan815
  • dan815
finance is kinda annoying because they have their own words for everything
inowalst
  • inowalst
Yes! Omg. .-.

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