Mrs Kirkpatrick (Age 65) Is About to Begin Receiving a CPP

question 62

Short Answer

Mrs. Kirkpatrick (age 65) is about to begin receiving a CPP retirement pension of $9,000 per year. This pension is indexed to the Consumer Price Index (CPI). Assume that the annual pension will be paid in a single year-end payment, the CPI will rise 3% per year, and money is worth 6% compounded annually. What is the current economic value of:
a) 20 years of pension benefits? b) 25 years of pension benefits?

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Definitions:

Ideal Situations

Circumstances or conditions perceived as the most favorable or perfect for achieving specific goals or outcomes.

Consumer Purchase Decision

The process that consumers go through in identifying and evaluating options before making a buying choice.

Information Search

The process by which individuals seek and gather information from various sources to make an informed decision.

Consumer Purchase Decision

The mental and emotional process leading up to a consumer's act of buying a product, encompassing need recognition, search for information, evaluation of alternatives, and the final acquisition.