8u skipped this question in the previous attempt An engineer who is now 65 years
ID: 2784620 • Letter: 8
Question
8u skipped this question in the previous attempt An engineer who is now 65 years ol when he retired, he would have more than enough d began planning for retirement 40 years ago. At that time, he thought that if he had $1 million money to live his remaining life in luxury Assume the inflation rate over the 40- year time period averaged a constant 4.9% per year. b) How many future dollars should he have accumulated over the 40 years to have a CV purchasing power equal to $29 million at rchasingp his current age of 65? a) The CV purchasing power is ST ] b) To have a CV purchasing power of $2.9 million, he should have accumulated $future dollars ?) 12.112017 e#a@Explanation / Answer
a.
Purchasing power = $1,000,000 / (1 + 4.90%) ^ 40
= $1,000,000 / 6.7767
= $147,564.02.
CV purchasing power at age of 65 is $147,564.02.
b.
Total Amount accumulated = $2,900,000 × 6.7767
= $19,652,487.36.
Total Amount accumulated value is $19,652,487.36.
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