You are 20 and plan to work for 45 years until you retire at 65. You expect to live until you are 90.
will collect a pension. Your annual pension payment will be equal to your final salary times a 3% crediting rate times the number of years that you work.
Your starting salary (paid at the end of the year) is $40,000. You expect to get a 4% annual raise.
Your discount rate is 5%.
ð Draw a timeline and
· Annual salary payment
· Time of retirement
· Annual pension payment
· Value of pension at retirement
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