You will receive a $100,000 inheritance in 20 years. You can invest
that money today at 6% compounded annually.  What is the present value
of your inheritance?

Dear pheifer-ga,

Good day!

The Present Value of a Future Amount is calculated using the following
formula:

FV = PV(1+r)^N

where
FV = Future Value
PV = Present Value
r = Interest Rate per period
N = No. of Compounding Periods

For the problem at hand,
FV = $ 100,000
r = 6%
N = 20
PV = ?

PV = 100,000 / (1 + 0.06)^20
PV = $ 31,180.47

Thus, $ 31,180.47 invested today at 6% compund interest rate will
become $ 100,000 in 20 years!

Jope this answer satisfies you :)

Thanks & regards,
reeteshv-ga

Additional links:

A very user-friendly article on the Present Value along with PV
calculator is available at moneychimp:
http://www.moneychimp.com/articles/finworks/fmpresval.htm

A concise PV calculator is available here:
http://www.tcalc.com/tvwww.dll?User


Search Strategy:

Present value
://www.google.co.in/search?q=Present+value&hl=en&ie=ISO-8859-1