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Popular Word Problems >

What is the present value of 50,000 which you are to receive 20 years from now, assuming that the inflation rate for the next 20 years will be about 4% per year?

Solution

Wha t i s t h e p rese n t v a l u e o f 50, 000 w hi c h yo u a re t o rece i v e 20 ye a rs f ro m n o w, a ss u min g t ha t t h e in f l a t i o n r a t e f or t h e n e x t 20 ye a rs w i ll b e ab o u t 4% p er ye a r ?

Solution

Amount : 90000

Solution steps

Translate the problem into an equation:

A = 50000 (1 + 0.04 \cdot 20)

50000 (1 + 0.04 \cdot 20) = 90000

Amount : 90000

Popular Examples

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