The plaintiff's annual salary for the last two years would have been $43,000 and $46,000, respectively. (b) The present value of five years' future salary. You assume the salary will be $51,000 per year. (c) $150,000 for pain and suffering. (d) $20,000 for court costs. Assume that the salary payments are equal amounts paid at the end of each month. If the interest rate you choose is an EAR of 5.9 percent, what is the size of the settlement? If you were the plaintiff, would you like to see a higher or lower interest rate? CAIN N00
The plaintiff's annual salary for the last two years would have been $43,000 and $46,000, respectively. (b) The present value of five years' future salary. You assume the salary will be $51,000 per year. (c) $150,000 for pain and suffering. (d) $20,000 for court costs. Assume that the salary payments are equal amounts paid at the end of each month. If the interest rate you choose is an EAR of 5.9 percent, what is the size of the settlement? If you were the plaintiff, would you like to see a higher or lower interest rate? CAIN N00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:$2,920.
58. Calculating Annuity Values You are serving on a jury. A plaintiff is suing
trial, doctors testified that it will be five years before the plaintiff is able to
the city for injuries sustained after a freak street-sweeper accident. In the
return to work. The jury already has decided in favor of the plaintiff. You
are the foreperson of the jury and propose that the jury give the plaintiff an
award to cover the following: (a) The present value of two years' back pay.
Transcribed Image Text:The plaintiff's annual salary for the last two years would have been $43,000
and $46,000, respectively. (b) The present value of five years' future salary.
You assume the salary will be $51,000 per year. (c) $150,000 for pain and
suffering. (d) $20,000 for court costs. Assume that the salary payments are
equal amounts paid at the end of each month. If the interest rate you choose
is an EAR of 5.9 percent, what is the size of the settlement? If you were the
plaintiff, would you like to see a higher or lower interest rate?
10.000
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