Recently received a substantial inheritance

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Reference no: EM13995844

Suppose that you learn that a friend recently received a substantial inheritance. Your friend was given two choices: 1) wait 10 years and receive the inheritance or 2) receive the present value of the inheritance (using a 3% discount rate) now. Your friend chose option #2, and received a hefty $700,000. How much would your friend have received if she waited 10 years to take the inheritance?

A) 910,000

B) 520,866

C) 1,000,000

D) 940,741

Reference no: EM13995844

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