The Good Fairy has offered to give you $1,000,000 in 20 years. She has volunteered to deposit the present value of the $1,000,000 in a trust managed by a bank or insurance company of your choice. How much must the Good Fairy deposit if the investment earns annual compounding interest of 5 percent?

The Good Fairy has offered to give you $1,000,000 in 20 years. She has volunteered to deposit the present value of the $1,000,000 in a trust managed by a bank or insurance company of your choice. How much must the Good Fairy deposit if the investment earns annual compounding interest of 5 percent?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 19P

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The Good Fairy has offered to give you $1,000,000 in 20 years. She has volunteered to deposit the present value of the $1,000,000 in a trust managed by a bank or insurance company of your choice.

How much must the Good Fairy deposit if the investment earns annual compounding interest of 5 percent?

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