Your grandmother left you $90,000 that you'll receive when you turn 40 in 18 years. Since you'd rather have some money now, you want to sell your claim to the inheritance. Attempt 1/10 for 10 pts. Part 1 What is the minimum amount that you should sell your claim for now if the interest rate is 5%

Question

Bradyn Wang

Business

21 June, 23:20

Your grandmother left you $90,000 that you'll receive when you turn 40 in 18 years. Since you'd rather have some money now, you want to sell your claim to the inheritance. Attempt 1/10 for 10 pts. Part 1 What is the minimum amount that you should sell your claim for now if the interest rate is 5%

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Answers (1)

Know the Answer?

Alma Conway · Answer 1

The minimum amount to sell the claim is = $37,396.85

Explanation:

The minimum amount is the present value of the the expected future sum discounted at the rate of 5%.

PV = FV * (1+r) ^ (-n)

FV - 90,000, r - 5%, n - 18

= 90,000 * (1.05) ^ (-18)

= 37,396.85

The minimum amount to sell the claim is = $37,396.85