Answer:
$537.78
Explanation:
In order to find the present value of a future payment we discount it using a discount rate. The formula for that is
Present value = Future value/(1+Rate)^Number of years.
In this case we know the future value is $20,000, the discount rate is 7.5% and the number of years are 50, so we just input these numbers in the formula to find the present value or worth today.
Present value = 20,000/(1+0.075)^50
=537.78
$20,000 due in 50 years would be worth $537.78 today if discounted by 7.5%
