Thornton Will Receive an Inheritance of $500,000 Three Years from Now

question 32

Multiple Choice

Thornton will receive an inheritance of $500,000 three years from now. Thorton's discount rate is 10% compounded semiannually. Which of the following values is closest to the amount that Thornton should accept today for the right to his inheritance?

• A) $373,108.
• B) $375,657.
• C) $665,500.
• D) $670,048.
• E) None of these. is within $10 of the correct answer.

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Definitions:

Acoustic Encoding

The process of converting auditory information into a memory or cognitive representation in the brain.

Sensory Encoding

The process by which sensory information is translated into signals that the brain can understand and process.

Visual Encoding

The process of converting visual images and scenes into a form that can be stored and recalled from memory.

Hyperthymesia

An extremely rare condition where an individual possesses an extraordinarily detailed autobiographical memory, remembering an unusual number of life events.