Asked by Kimberly Medlin on Apr 28, 2024
Verified
Your client has a choice of either receiving $5,000 two years from now or receiving a lump payment today. If your client can earn 5.4% compounded semi-annually, what amount received today is equivalent to $5,000 in two years? (Taken from CIFP course materials)
Compounded Semi-Annually
The method of calculating interest where the accrued interest is added to the principal sum every six months.
Lump Payment
A single, large payment made at once, as opposed to smaller, periodic payments.
- Absorb the key aspects of time value of money in order to calculate matching payment streams and investment outcomes.
Verified Answer
KK
Learning Objectives
- Absorb the key aspects of time value of money in order to calculate matching payment streams and investment outcomes.