An actor signs a film contract that will pay $10 millions when the film is completed, 3 years from now

present-value
contract

#1

An actor signs a film contract that will pay $10 millions when the film is completed, 3 years from now. Assuming the money can be invested at 5% interest, compounded continuously, and what is the present value of this contract?

Answer:

$10 * (1+5/100)^3million=$11.57625 million