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Unformatted text preview: To illu with the following assumptions: 1. A firm has only one employee, age 40, who will retire in 25 years at age 65, will die at age 80, and hence live for retirement. 2. The firm has promised a benefit of $10,000 at the end of each year following retirement until death. For accou this $10,000 will be vested each year the employee works for the company. 3. The company will definitely make the required payments over the next 25 years in order to build up the fund t make the payments of $10,000 per year during the employee's 15 year retirement life. 9/23/2006 sion plans. This ty or surplus. It is ustrate the process, begin r 15 years after unting purposes 1/25 of to the level needed to...
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This note was uploaded on 06/15/2011 for the course FI515 FI515 taught by Professor Fi515 during the Spring '10 term at Keller Graduate School of Management.
- Spring '10