Test Your Knowledge - Inflation adjusted Interest/ Investment Rate (adjusted i) Let us say a client wants RM 108,000 retirement income per year. His life expectancy is say 20 years. He wants his income to increase every year by 4%. His investment performance is 8% per year. How much Present Value sum must he accumulate for his retirement? Solution: First, we need to determine the adjusted i using the formula: adjusted i = (i-g) / (1+g), where Investment or Interest Rate and g = Growth or Inflation Rate. From here we know that the adjusted i = Choose your answer %. (4 decimal places, do not round the number) Next, using the TVM calculator and the adjusted i that you found above, we will find that the client requires RM Type your answer to fulfill his retirement requirement. (Please use the adjusted i value with 4 decimal places, for example 3.8462).