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Assume that Social Security promises you $38,000 per year starting when you retire 45 years from today (the first $38,000 will get paid 45 years
Assume that Social Security promises you $38,000 per year starting when you retire 45 years from today (the first $38,000 will get paid 45 years from now). If your discount rate is 8%, compounded annually, and you plan to live for 16 years after retiring (so that you will receive a total of 17 payments including the first one), what is the value today of Social Security's promise? The value today of Social Security's promise is $ (Round to the nearest cent.) You have an investment account that started with $2,000 10 years ago and which now has grown to $5,000. a. What annual rate of return have you earned (you have made no additional contributions to the account)? b. If the investment account earns 14% per year from now on, what will the account's value be 10 years from now? a. What annual rate of return have you earned (you have made no additional contributions to the account)? Your annual rate of return is %. (Round to two decimal places.)
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