Question
After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources
| After completing a long and successful career as senior vice president for a large bank, you are preparing for retirement. After visiting the human resources office, you have found that you have several retirement options to choose from: |
| a. | An immediate cash payment of $1 million. |
| b. | Payment of $92,000 per year for life. |
| c. | Payment of $82,000 per year for 10 years and then $95,000 per year for life (this option is intended to give you some protection against inflation). |
| You believe you can earn 8 percent on your investments and your remaining life expectancy is 20 years. |
| Required: | |
| 1. | Calculate the present value of each option. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.Enter your answers in dollars but not in millions.) |
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The Quality Audit Handbook
Authors: Asq Quality Audit Division, J. P. Russell
2nd Edition
087389460X, 978-0873894609
