Don Turned 60 Years Old Today and Has Retired from Hydro

question 80

Multiple Choice

Don turned 60 years old today and has retired from Hydro One. Current economic value of his pension is his significant asset. He will be receiving pension payments of $84 000 every year. Based on a 22-year life expectancy and money worth 8% compounded annually and money depreciating at 2% annually, calculate the current economic value of Don's pension.

• A) $740 932
• B) $877 326
• C) $1 001 884
• D) $1 234 888
• E) $832 256

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Definitions:

Liability

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of assets, provision of services, or other economic benefits.

Voucher

A document that serves as evidence of a business transaction and authorizes the recording of that transaction in an accounting system.

Debit Memo

A document or entry that records an adjustment or increases in an account, typically indicating a debtor owes more money to the creditor.

Bank Service Charges

Fees charged by banks for various account and transaction services provided to customers.