Your first job out of college will pay you $73,000 in year 1 (exactly one year...
Your first job out of college will pay you $73,000 in year 1 (exactly one year from today). You estimate that your salary will grow at 6% per year. You plan to retire in 37 years (you'll receive 37 years of salary). If the applicable discount rate is 9%, what is the present value of these future earnings today? Round to the nearest cent.
Homework Answers
PV of annuity with growth = (P/ (r-g)) * (1- ((1+g)/(1+r))^n)
= (73000/(9%-6%))*(1-((1+6%)/(1+9%))^37
= 2433333.33* 0.643929=
| 1566893.93 |
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