+0

# You are promised $1 million in 20 years. If the inflation rate averages 6 percent annually over the next 20 years, what is the real value of 0 354 1 You are promised$1 million in 20 years. If the inflation rate averages 6 percent annually over the next 20 years, what is the real value of this $1 million in today's dollars? Guest Sep 13, 2014 ### Best Answer #1 +92206 +5 Well that would depend on how often the money is compounding but to make it easy I will say it is compounding annually. P(1.06^20)=1000000 p=1000000/(1.06^20) $${\frac{{\mathtt{1\,000\,000}}}{\left({{\mathtt{1.06}}}^{{\mathtt{20}}}\right)}} = {\mathtt{311\,804.726\: \!886\: \!084\: \!594\: \!591\: \!2}}$$ ### A million dollars in 20 years is equivalent to$311 804  today.

Melody  Sep 14, 2014
Sort:

#1
+92206
+5

Well that would depend on how often the money is compounding but to make it easy I will say it is compounding annually.

P(1.06^20)=1000000

p=1000000/(1.06^20)

$${\frac{{\mathtt{1\,000\,000}}}{\left({{\mathtt{1.06}}}^{{\mathtt{20}}}\right)}} = {\mathtt{311\,804.726\: \!886\: \!084\: \!594\: \!591\: \!2}}$$

### A million dollars in 20 years is equivalent to    \$311 804  today.

Melody  Sep 14, 2014

### 23 Online Users

We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners.  See details