Question

In 15 years, Anthony Willow is to receive $100,000 under the terms of a trust established by his grandparents. Assuming an interest rate of 5.3%, compounded continuously, what is the present value of Anthony's legacy? The present value of the legacy is $ (Round to the nearest cent as needed.)

Answer 1

Answer: $216,982.93

Explanation:

Assuming that the sum (100,000) is compounded by 5.3% each year, this scenario can be represented by the following equation:

100,000(1.053^x)

1.053 is the equivalent of 5.3%, and x represents the number of years.

The present value in 15 years could be found by plugging in 15 for x.

100,000(1.053^15)

100,000(2.169829292)= $216982.9292

Remember to round