Ms. Anna Ang, aged 39, recently purchased an endowment plan from an insurer that requires her to set aside $24,000 per year for the next 23 years till she retires at age 62. The first premium payment occurs at the beginning of the period. Assuming an inflation rate of 2% and an estimated rate of return of 4.0% from the endowment plan, what is the estimated future value of Anna’s regular savings at age 62?

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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Ms. Anna Ang, aged 39, recently purchased an endowment plan from an insurer that requires her to set aside $24,000 per year for the next 23 years till she retires at age 62. The first premium payment occurs at the beginning of the period. Assuming an inflation rate of 2% and an estimated rate of return of 4.0% from the endowment plan, what is the estimated future value of Anna’s regular savings at age 62?  

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