Examlex

Solved

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

question 29

Essay

A pension plan promises to pay $75,000 at the end of each year for 25 years 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 5%; or
b. discount rate of 4%.


Definitions:

Restatement (Second)

A collection of model legal rules and principles meant to clarify the common law in the United States, not binding but influential.

Law of Contracts

A set of laws that govern the formation, execution, and enforcement of agreements between parties.

Bilateral

Pertaining to or involving two sides, parties, or countries, often used in the context of agreements or contracts that require obligations from both parties.

Unilateral

A mistake that is the result of an error by one party about a material fact, that is, a fact that is important in the context of the particular contract.

Related Questions