Question 120:

Jack and Jill have a sick-year consulting contract with an insurance company. For the first three years of the contract, the company guarantees them $35,000 in real dollars per year plus $35,000 in actual dollars per year. For years 4 and 5 of the contract, the company will pay them $45,000 in real dollars per year. And for year 6, they will receive #45,000 in real dollars plus $45,000 in actual dollars. They estimate inflation to be 4.55% per year for the duration of the contract. Their actual MARR is 15%

a. What is the FW of the amounts paid in real dollars during the contract b. What is the total amount paid in year 6 to Jack and Jill in real dollars c. What is the total amount paid in year 3 to Jack and Jill in actual dollars d. What is the real MARR for the contract e. What is the PW of the amounts paid in actual dollars during the contract