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