A Pension Plan Promises to Pay $75,000 at the End

question 54

Essay

A pension plan promises to pay $75,000 at the end of each year of the retirement period.
Required:
Compute the funds required to fund this pension plan at the start of the retirement period assuming:
a. discount rate of 9% and a retirement period of 30 years; or
b. discount rate of 9% and a retirement period of 40 years.

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Definitions:

Motivated

Being driven or prompted to act in a particular way or to achieve a specific outcome, often due to internal or external factors.

Self-Fulfilled Person

An individual who has achieved their fullest potential, often through self-discovery, realizing personal talents, and pursuing meaningful goals.

Personal Autonomy

The capacity of a person to make an informed, uncoerced decision, and to act upon such decisions independently.

Accurate Perception

The ability to understand and interpret events, situations, or data correctly, without letting biases influence one's judgment.