Dear all,
Would you help me with one of the practice questions related to defined benefit plans?
On p, 184 Volume 2. Scenario 4 it is said that Value at the end of year 5 of the estimated future payments = PV of 13,544.68 for 20 years at 6 per cent = 155,356. I get the concept but I can’t seem to arrive at that number. Could you please help me with that?
Kind regards
Niko
It’s a basic TVM calculation. Make sure you have P/Y = 1 in your calculator, and clear your calculator.
Enter the keystrokes, and hit CPT PV, and you get $155,356.4125.
(BTW–I didn’t look at the problem. I’m just going by your information.)
Wait, my calculation was just the simple TVM calc. I didn’t take into consideration that you’re looking for the value at year 5. So nevermind my last.
Thank you!
LOL and I passed Level 1:) Sometimes the simplest things are the ones that avoid us