Respuesta :
Answer:
Option (C) $364,309
Explanation:
Data provided in the question:
Amount paid every 3 months, A = $50,000
Number of years = 2
Interest rate = 8.5% = 0.085
Now,
since amount is paid every 3 months therefore compounding will be done every quarter
thus,
total number of periods in 2 years, n = 4 × 2 = 8
Interest rate per period, r = 0.085 ÷ 4 = 0.02125
Present value = A × [ 1 - ( 1 ÷ (1 + r)ⁿ)] ÷ r
thus,
Present value = $50,000 × [ 1 - ( 1 ÷ (1 + 0.02125 )⁸)] ÷ ( 0.02125 )
or
= $50,000 × [ 0.1548 ] ÷ ( 0.02125 )
= $364,308.76 ≈ $364,309
Hence,
Option (C) $364,309
The present value (PV) of the inheritance received by Drew is $364,235.Thus, Option C is the correct value.
What is the present value of an annuity?
The present value of an annuity is its value after accumulating interest a few times, given a specified rate of return or discount rate.
Given information:
Value of each payment(P) is $50,000
Rate is 8.5 divided by 4 is 2.125%
The number of periods (n) is 2 multiplied by 4 is equal to 8
[tex]\rm\,PV = P\times\,\dfrac{1 - (1+r)^{-n}}{r}\\\\\\\rm\,PV = 50,000\times\,\dfrac{[1 - (1+0.02125)^{-8}]}{0.02125}\\\\\\\rm\,PV = 50,000\times\,\dfrac{0.1548}{0.02125}\\\\\\\rm\,PV = 50,000\times\,7.2847\\\\\\\rm\,PV = \$364,235[/tex]
Hence, Option C. $364,235 is the correct choice.
To learn more about the Present value of an annuity, refer to the link:
https://brainly.com/question/25792915
