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Assume that your superannuation fund promises you $40,000 per year starting when you retire 45 years from today (the first $40,000 will come 45 years
Assume that your superannuation fund promises you $40,000 per year starting when you retire 45 years from today (the first $40,000 will come 45 years from now). If your discount rate is 8%, compounded annually, and you plan to live for 17 years after retiring (so that you will get a total of 18 payments including the first one), what is the value today of the superannuation funds's promise?
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