How much should you be able to get if you sell your future

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Assume that your grandfather has left you $100,000 to be paid to you on your 35th birthday. However, you need money now to continue your education. Assume that you have just completed your 20th birthday. Until your 35th birthday, your grandfather’s trust fund will be managed by the Neopolitan Bank, one of the most trustworthy in the world. After conversation with a bank official, you learn that they might be willing to “buy” your future inheritance, giving you a sum of money now that will be repaid with your grantfather’s bequest, once it becomes available. If you know that the interest rate is 7%, roughly how much should you be able to get if you sell your future inheritance to the Neopolitan Bank (or any other bank) right now? Explain your work and why your answer makes intuitive sense.

Reference no: EM13147742

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