To calculate the present value of $2 million payable in 20 years at an 8% interest rate, we can use the formula for present value:

PV = FV / (1 + r)^n

Where:
PV = Present Value
FV = Future Value
r = Interest Rate
n = Number of years

Plugging in the given values:
FV = $2 million
r = 8% (or 0.08)
n = 20 years

PV = $2,000,000 / (1 + 0.08)^20

Now, let's calculate the present value step by step:

1. Calculate the denominator:
(1 + 0.08)^20 = 3.207135

2. Divide the future value by the denominator:
$2,000,000 / 3.207135 = $623,116.69

Therefore, the present value of $2 million payable in 20 years at an 8% interest rate is approximately $623,116.69.

Question

To calculate the present value of $2 million payable in 20 years at an 8% interest rate, we can use the formula for present value:

PV = FV / (1 + r)^n

Where:
PV = Present Value
FV = Future Value
r = Interest Rate
n = Number of years

Plugging in the given values:
FV = $2 million
r = 8% (or 0.08)
n = 20 years

PV = $2,000,000 / (1 + 0.08)^20

Now, let's calculate the present value step by step:

1. Calculate the denominator:
(1 + 0.08)^20 = 3.207135

2. Divide the future value by the denominator:
$2,000,000 / 3.207135 = $623,116.69

Therefore, the present value of $2 million payable in 20 years at an 8% interest rate is approximately $623,116.69.

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