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Your Uncle Joe recently died and left you $10,000\$10,000 payable when you turn 30. You are now 20 years old. At the moment, the annual rate of interest obtained by purchasing 10-year bonds is 6.56.5 percent. Your brother is currently offering you $6,000\$6,000 in cash to sign over your inheritance. Should you go ahead with it? Explain your response.

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It should be borne in mind that the $10,000 that Uncle Joe left we will be able to dispose of in 10 years (when he turns 30), however, our brother is offering us $6,000 today and leave the inheritance to him. Taking an interest rate of 6.5% on 10-year bonds, we can calculate the present value (PV) of these $10,000.

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