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2. A senior executive is offered a buyout package by his company that will pay him a monthly benefit for the next 20 year. Monthly
2. A senior executive is offered a buyout package by his company that will pay him a monthly benefit for the next 20 year. Monthly benefits will remain constant within each of the 20 years. At the end of each 12-month period, the monthly benefits will be adjusted upwards to reflect the percentage increase in the CPI (inflation). You are given; The first monthly benefit is R and will be paid one month from today. The CPI increases 3.2% per year forever At an annual effective interest rate of 6%, the buyout package has a value of $100,000. Calculate R 2. A senior executive is offered a buyout package by his company that will pay him a monthly benefit for the next 20 year. Monthly benefits will remain constant within each of the 20 years. At the end of each 12-month period, the monthly benefits will be adjusted upwards to reflect the percentage increase in the CPI (inflation). You are given; The first monthly benefit is R and will be paid one month from today. The CPI increases 3.2% per year forever At an annual effective interest rate of 6%, the buyout package has a value of $100,000. Calculate R
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