Question
Good news: You will almost certainly be a millionaire by the time you retire in 40 years. Bad news: The inflation rate over your lifetime
Good news: You will almost certainly be a millionaire by the time you retire in 40 years. Bad news: The inflation rate over your lifetime will average about 2.9%.
a. What will be the real value of $1 million by the time you retire in terms of todays dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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b. What real annuity (in todays dollars) will $1 million support if the real interest rate at retirement is 2.1% and the annuity must last for 10 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Real annuity?
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