Present value. You are currently in the job market. Your dream is to earn a six-figure...

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Present value. You are currently in the job market. Your dream is to earn a six-figure salary ($150,000). You hope to accomplish this goal within the next 22 years. In your field, salaries grow at 3.5% per year. What starting salary do you need to reach this goal?

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Answer 1

Answer #1

Answer:

Dream salary = FV = $150,000

Time period = 22 years

Annual growth = 3.5%

Starting salary = PV = FV / (1 + Annual rate) ^{Number of
periods}

= 150000 / (1 + 3.5%) ²²

= 70372.5946

Starting salary = $70372.59

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Answer 2

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