Answer:
The value of this inheritance is $78,192.28
Step-by-step explanation:
The monthly payments Sara will receive starting today for next 40 years is $500.
Annual Interest Rate = 7.3%
Monthly Interest Rate = Annual Interest Rate/12
=7.3/12
Monthly Interest Rate = 0.6083%
Present Value = $500 + $500/1.006083 + $500/1.006083^2 + $500/1.006083^3 + ... + $500/1.006083^479
Present Value = $500 * 1.006083 * (1 - (1/1.006083)^480) / 0.006083
Present Value = $500 * 156.39156
Present Value = $78,192.28
Thus, the value of this inheritance is $78,192.28
