A defined-benefit retirement plan – once you retire - will pay $30,000 per year for 40...
A defined-benefit retirement plan – once you retire - will pay $30,000 per year for 40 years and increase the annual payment by three-percent each year. What is the present value at retirement if the discount rate is 7 percent?
$265,311
$381,212
$456,713
$586,620
$642,311
Please help urgently. No work needs to be shown.
Homework Answers
![First payment $30,000 present value = p/(r-g) x 1-[(1+g)/(1+r)]n p/(r-g) = $750,000 30000/(0.07-0.03) 1-[(1+g)/(1+r)]n = 0.78](http://img.homeworklib.com/questions/149a5bd0-77b1-11ea-bdc4-91ac8f26d08a.png?x-oss-process=image/resize,w_560)
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