You are currently six years away from the date you planned to retire. Unfortunately, you were in
Question:
You are currently six years away from the date you planned to retire. Unfortunately, you were in a work-related accident two years ago and have not been able to work since. You went to court and the jury decided in your favor and ruled that the defendant must pay for your past and future lost wages and pain and suffering costs of $250,000. The judge assumes the pain and suffering was experienced two years ago and must be converted into today's dollars. It has been determined that your salary two years ago would have been $100,000 and was expected to grow 4% the following two years and then remain constant until retirement. If the defendant is ordered to make the entire payment today, how much will you receive today if the effective annual rate is 8% and all your salary payments come in monthly installments?