In the above how did the author arrive at 6.275 million. I understand that the adjusted discount rate of (1.061/1.02)-1= 4.019% and N will be 25 years. However the answer I am arriving at is 7.79 million.

Can someone please show the calculation of how it is arrived at? @S2000magician @Greybeard_The_Elder

Thanks in advance.

Anyone with any explanation?

I do not know. I get the same number as you.

8.1% gives $6,275,000ish.

8.1 is not given.

Aren’t we supposed to use adjusted discount rate?

How did you arrive at the figure using 8.1 can you share a detailed calculation please?

I just stuck it in Excel and solved for the rate that corresponds to a 6.275 million initial investment.

I understand that 8.1% is not given. That’s how I arrived at “I do not know” as my original answer.