What is the present value of $1,000,000 to be received in 15 years, if the opportunity...

What is the present value of $1,000,000 to be received in 15 years, if the opportunity cost is 3.50% annually?

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Expert Solution

Compute the present value of sum received after 15 years from now, using the equation as shown below:

Present value = Future value/ (1 + Rate)^Time

= $1,000,000/ (1 + 0.035)^15

= $1,000,000/ 1.6753488307

= $596,890.618643

Hence, the present value of sum received after 15 years from now is $596,890.618643.

jeff jeffy answered 2 years ago

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