# \$187,500 for 30 yrs at 21/2% ayr--What is present cash value?

1. 48
Vin Apruzzeseposted 7 years ago

\$187,500 for 30 yrs at 21/2% ayr--What is present cash value?

2. 54
carterlewis03posted 7 years ago

is this simple rate of interest or compound.
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3. 61
fundguruposted 7 years ago

If every year the return was reinvested then:

187.500*(1,215^30)=64.608.492,84

If the return for every year is only 21,5 % on the 187.500 then:

187.500+ 30*0.215*187.500 = 1.396.875

This would be generally the ammount of Dollar.

The value then depends on the inflation rate in the same period. Lets say 3% per year.

Then 1 Dollar of 30 years ago has today the purchasing power:

1/(1,03^30) = rounded 0,412 \$

So the 64.608.492,84 would have the purchasing power of 26.618.699,05 compared to 30 years ago.

In the second case the 1.396.875 would have the purchasing power of 575.512,5 compared to 30 years ago.

4. 60
jamesrkposted 7 years ago

Hi Vin, Sorry but I don't understand what 21/2% is.

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