Determine the present value of future contributions to a pension plan for a person aged 35, earning 30.000$ per year and expecting to retire at 65. The pension plan requires contributions of 5% of salary and the employee expects to receive average annual salary increases of 3%. Use an annual effective rate of interest of 7% and assume contributions are made at the end of each year.
Determine the present value of future contributions to a pension plan for a person aged 35, earning 30.000$ per year and expecting to retire at 65. The pension plan requires contributions of 5% of salary and the employee expects to receive average annual salary increases of 3%. Use an annual effective rate of interest of 7% and assume contributions are made at the end of each year.
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 16CE
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Determine the present value of future contributions to a pension plan for a person aged 35, earning 30.000$ per year and expecting to retire at 65. The pension plan requires contributions of 5% of salary and the employee expects to receive average annual salary increases of 3%. Use an annual effective rate of interest of 7% and assume contributions are made at the end of each year.
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