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Help with solving algebra word problem

Algebra
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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.)

Nov 24th, 2014

FV = $50000
PV= ?
Rate(r) = 3
time(t) = 30

Using the formula,
FV= PV(1+r/100)^t

or, 50000= PV(1+3/100)^30
or, PV= 50000/(1+3/100)^30 = $20599.34 (answer)


Please best my answer if helpful. Thanks :)

Nov 24th, 2014

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Nov 24th, 2014
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Nov 24th, 2014
Dec 9th, 2016
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