Solutions to Chapter 1

The present value of the $2 million, 20-year annuity, discounted at 8%, is: PV=million. If the payment comes immediately, the present value increases by a factor of 1.08 to $21.21 million. 41. 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. 42. r = 0.5% per month ................
................

In order to avoid copyright disputes, this page is only a partial summary.