Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $50,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 3% compounded annually? (round answer to nearest cent.)
FV = $50000PV= ?Rate(r) = 3time(t) = 30Using the formula, FV= PV(1+r/100)^tor, 50000= PV(1+3/100)^30or, PV= 50000/(1+3/100)^30 = $20599.34 (answer)Please best my answer if helpful. Thanks :)
Content will be erased after question is completed.
Enter the email address associated with your account, and we will email you a link to reset your password.
Forgot your password?