Solutions to Chapter 1

The present value of the $2 million, 20-year annuity, discounted at 8%, is. $19.64 million. If the payment comes immediately, the present value increases by a factor of 1.08 to $21.21 million. 40. The real rate is zero. With a zero real rate, we simply divide her savings by the years of retirement: $450,000/30 = $15,000 per year… ................
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