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blakenordgaard blakenordgaard
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10 months ago
Ida Ho is about to retire from a government job with a pension that is indexed to the Consumer Price Index (CPI). She is 60 years old and has a life expectancy of 25 years.


a) Estimate the current economic value of her pension which will start at $20,000 per year? For the purpose of this estimation, assume that Ida will draw the pension for 25 years, the annual pension will be paid in a single year-end payment, the CPI will rise 2.5% per year, and money is worth 5% compounded annually.
b) How much of the current economic value comes from indexing?
Textbook 
Business Mathematics in Canada

Business Mathematics in Canada


Edition: 11th
Authors:
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Ama1911Ama1911
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10 months ago
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blakenordgaard Author
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10 months ago
Thanks for your help!!
alpheratz
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
macbookpro1
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2 hours ago
Helped a lot
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