algebra

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Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $30,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 3% compounded annually? (Round your answer to the nearest cent.)

  • algebra -

    PV = FV / (1 + r)^n
    = 30000/(1.03)^30
    = $12,359.60

  • algebra -

    Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $50,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 3% compounded annually?

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