You expect to work for another 30 years. At your retirement in year 30, you expect your company's pension plan is worth $850,000. The interest rate is 6% per year. Suppose you are contemplating a switch to a new employer. The new employer will match your annual base salary. However, the new employer offers no pension plan. The new employer offers to pay you a flat annual bonus, on top of your base salary, to compensate you for the loss of the pension plan. How much of an annual bonus would you require before you were just willing to make the switch? a. $9,568 b. $10,200 c. $10,752 d. $11,546
You expect to work for another 30 years. At your retirement in year 30, you expect your company's pension plan is worth $850,000. The interest rate is 6% per year. Suppose you are contemplating a switch to a new employer. The new employer will match your annual base salary. However, the new employer offers no pension plan. The new employer offers to pay you a flat annual bonus, on top of your base salary, to compensate you for the loss of the pension plan. How much of an annual bonus would you require before you were just willing to make the switch? a. $9,568 b. $10,200 c. $10,752 d. $11,546
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
Problem 1PS
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You expect to work for another 30 years. At your retirement in year 30, you expect your company's pension plan is worth $850,000. The interest rate is 6% per year. Suppose you are contemplating a switch to a new employer. The new employer will match your annual base salary. However, the new employer offers no pension plan. The new employer offers to pay you a flat annual bonus, on top of your base salary, to compensate you for the loss of the pension plan. How much of an annual bonus would you require before you were just willing to make the switch?
| a. |
$9,568 |
|
| b. |
$10,200 |
|
| c. |
$10,752 |
|
| d. |
$11,546 |
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