Question
A pension fund currently makes payouts to beneficiaries of $1,000,000U per year, with those payouts expected to grow with a forecasted inflation rate of 2%
A pension fund currently makes payouts to beneficiaries of $1,000,000U per year, with those payouts expected to grow with a forecasted inflation rate of 2% per year forever. Compute how much money the pension fund currently needs to have now in order to fully fund that liability (and ensure those payouts to pensioners are made) if interest rates are 2.87%.
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Financial Management For Nonprofit Organizations Policies And Practices
Authors: Jo Ann Hankin, John Zietlow, Alan Seidner, Tim O'Brien
3rd Edition
1119382564, 9781119382560
