Question
You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors
You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already decided in favor of the plaintiff. You are the foreperson of the jury and propose that the jury give the plaintiff an award to cover the following:
- (a) The present value of two years back pay. The plaintiffs annual salary for the last two years would have been $67,000 and $70,000, respectively.
- (b) The present value of five years future salary. You assume the salary will be $73,000 per year.
- (c) $245,000 for pain and suffering.
- (d) $40,000 for court costs.
Assume the salary payments are equal amounts paid at the end of each month. If the interest rate you choose is an EAR of 8 percent, what is the size of the settlement?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Award $ If you were the plaintiff, would you like to see a higher or lower interest rate? (Click to select)HigherLower
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started