Question

Don wants to accumulate $55,000 in today's dollar terms in the next 6 years. He expects...

Don wants to accumulate $55,000 in today's dollar terms in the next 6 years. He expects to earn a return of 6.5% per year and inflation is expected to be 1.5%. How much should be the serial payment in the 1st year so that Don can achieve the target?

$6830

$8101

$8346

$8223
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Homework Answers

Answer #1

Given,

Future value = $55000

Number of years (n) = 6 years

Return = 6.5% or 0.065

Inflation = 1.5% or 0.015

Solution :-

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