Drew Receives an Inheritance That Pays Him $50,000 Every Three

question 47

Multiple Choice

Drew receives an inheritance that pays him $50,000 every three months for the next two years. Which of the following is closest to the present value (PV) of this inheritance if the interest rate is 8.5% (EAR) ?

• A) $364,309
• B) $365,322
• C) $400,000
• D) $354,223

---

Definitions:

Thomas Nagel

An American philosopher known for his contributions to philosophy of mind, political philosophy, and ethics, particularly famous for the essay "What Is It Like to Be a Bat?".

Bat

A nocturnal, flying mammal, capable of echolocation, belonging to the order Chiroptera, known for their role in pollinating plants and controlling insect populations.

Understand

The ability to grasp the meaning, significance, or nature of something.

Aristophanes

An ancient Greek playwright and a master of comedy, known for his satirical plays critiquing social, political, and cultural issues of Athens.