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You are a pension fund manager. According to your estimates retirees will be paid benefit worth Rs 750000 per year, starting 12 years from now. There will be a total of 20 payments. The discount rate is of 7%. What amount will you need to set aside today so that you can pay the retirees as estimated?

You are a pension fund manager. According to your estimates retirees will be paid benefit worth Rs 750000 per year, starting 12 years from now. There will be a total of 20 payments. The discount rate is of 7%. What amount will you need to set aside today so that you can pay the retirees as estimated?

Essentials Of Investments
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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You are a pension fund manager. According to your estimates retirees will be paid benefit worth Rs 750000 per year, starting 12 years from now. There will be a total of 20 payments. The discount rate is of 7%. What amount will you need to set aside today so that you can pay the retirees as estimated?
Transcribed Image Text:You are a pension fund manager. According to your estimates retirees will be paid benefit worth Rs 750000 per year, starting 12 years from now. There will be a total of 20 payments. The discount rate is of 7%. What amount will you need to set aside today so that you can pay the retirees as estimated?
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