Average annual earnings = $80,000
annual earnings available after taxes and living expenses = $80,000 * 50% = $40,000
To calculate the human life value, we have to discount 30 years of cash flows of $40,000 each back to the present, using a 6% discount rate.
This is calculated using PV function in Excel with these inputs :
rate = 6%
nper = 30
pmt = -40,000
PV is calculated to be $550,593
this is the human life value of Tom
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