Assume the real rate of interest is 3.00% and the inflation rate is 6.00%. What is the value today of receiving 14,488.00 in 13.00 years?

Present Value = $15,874.25

Explanation:

Giving the following information:

Assume the real rate of interest is 3.00% and the inflation rate is 6.00%. What is the value today of receiving 14,488.00 in 13.00 years?

This is a rare case where the interest rate is negative:

Interest rate = 0.03 - 0.06 = - 0.03

Having said this, the present value is higher than the final value:

PV = FV / (1+i) ^n

PV = 14,488 / 0.97^3 = $15,874.25