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Need help with b. please. Cindy Arella's godmotherjust left her an inheritance of $100,000: Cindy will receive a payment of $100,000 when she turns 21,
Need help with b. please.
Cindy Arella's godmotherjust left her an inheritance of $100,000: Cindy will receive a payment of $100,000 when she turns 21, which will be in 8 years. Here is a diagram:
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The nominal interest rate is 4% per year, and the inflation rate is expected to be 1% per year.
a. Calculate the present value of Cindy's inheritance using nominalcash flows. b.Draw a diagram of the real cash flow corresponding to Cindy's inheritance.c.Calculate the present value of Cindy's inheritance using realcash flows.
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