How much should you be able to get if you sell your future, Ask an Expert

Economics

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.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M9437886

Have any Question?Write your Review or question?

Related Questions in Business Economics

The local police department must write an average of 5

The local police department must write an average of 5 traffic tickets each day to keep department revenues at budgeted levels. Suppose the number of tickets written per day follows a Poisson distribution with a mean of ...

Why the use of nash equilibrium is a solution concept in

Why the use of Nash equilibrium is a solution concept in games? Please give me an detailed explain.

Consider the following cournot oligopolythere are two

Consider the following Cournot oligopoly: There are two identical firms in the industry, which set their quantities produced simultaneously. The two firms face a market demand curve, Q = 120 - P, in which Q = q1 + q2. Ea ...

Two manufacturing firms are located on the banks of the

Two manufacturing firms are located on the banks of the Crimea River. Riditna Paper withdraws river water for use in its paper mill, and returns it, along with waste effluent, back into the river. (Effluent is a co-produ ...

Sixty percent of households say they would feel secure if

Sixty percent of households say they would feel secure if they had? $50,000 in savings. You randomly select 8households and ask them if they would feel secure if they had? $50,000 in savings. Find the probability that th ...

Espn pays the nfl 11 billion per year for 8 yrs for the

ESPN pays the NFL $1.1 Billion per year for 8 yrs for the right to exclusively televise football. What is the NPV of the investment if the parent Disney CO has an opportunity interest rate that is equal to the cost of ca ...

The distribution of heights of adult american women is

The distribution of heights of adult American women is approximately normal with a mean of 64 inches and standard deviation of 2 inches. What percent of women is taller than 68 inches?

Consider a machine with exponential reliability model

Consider a machine with exponential reliability model. Assume that the breakdown rate is 1 and the repair rate is 2. Calculate the probability that the machine is up for more than 10 units of time. Calculate the probabil ...

The equation used to predict how long a cold will last is

The equation used to predict how long a cold will last is y=-1.8 + 0.09x1 + 3.2x2 - 1.9x3, where x1 is person's temperature on the first day, x2 is number of people seen each day, and x3 is the amount of sleep the person ...

How do bribery and corruption influence the economy

How do bribery and corruption influence the economy negatively? Answer and explain three major impacts.

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert