Answered: How many dollars would be the…

How many dollars would be the retirement pension if the person at the age of 65 wants to change their lifetime life insurance to a retirement plan with a 10-year pension payment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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Concept explainers

Employer Pension Plan

An employer pension plan is a retirement benefit provided by an employer to employees before or after they retire. Over the course of the employees' working lives, the employer should invest a lump sum or make monthly contributions to investment schemes in employees' names. It is the employer's legal responsibility to provide employees with retirement plans that support them with guaranteed financial security in retirement.

Question

In a retirement plan, a 25-year-old person pays 35 years premium at the beginning of each year up to the age of 60, and from the age of 60, at the beginning of each year, a lifetime pension of $ 15,000 em 3% and a retirement bonus of $ 500,000 at age 60. Based on 3% annual interest and 1958 CSO mortality:

-> How many dollars would be the retirement pension if the person at the age of 65 wants to change their lifetime life insurance to a retirement plan with a 10-year pension payment.

Thank you so much.

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