Question
Please show all work. Thank you! 18. A pension fund currently makes payouts to beneficiaries of $1,000,000U per year, with those payouts expected to grow
Please show all work. Thank you!
18. 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%.
18. B. 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 for 30 years. Compute how much money the pension fund currently needs to have now in order to fully fund that liability (and
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