Help with #1? I don't understand.
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The present value (PV) of $15,254.24 is the most James bennett can consume in his youth.
<u>Given the following data:</u>
- Inheritance = $3000
- Interest rate = 18%
- Investment opportunity (youth) = $12,000
- Investment opportunity (old age) = $15,000
To calculate the most James bennett can consume in his youth:
First of all, we would determine the future value of James bennett from his investment and inheritance as follows:
FV = $18000
Mathematically, the most James bennett can consume in his youth is given by this formula:
Substituting the given parameters into the formula, we have;
PV = $15,254.24
Therefore, the present value (PV) of $15,254.24 is the most James bennett can consume in his youth.
Read more on present value here: brainly.com/question/24341207