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Lostsunrise [7]
3 years ago
13

Crane Flight Services contributes $25 a week to Helen's retirement plan starting immediately. Assuming she works for Crane for a

nother twenty-two years and the applicable discount rate is 4 3/4%. Given these assumptions, the value of this employee benefit today is closest to: (state your answer to 2 decimal places)
Business
1 answer:
Zigmanuir [339]3 years ago
7 0

Answer:

The value of this employee benefit today is closest to $17,758.66

Explanation:

Crane Flight services per week contribution C = $25

Discount rate per r=4.75%

Discount rate per week r= 4.75% / 52 =0.0913%

Total Payment N = $52 * 22 years = $1,144

Current value of employee benefit P = C*(1+r)*(1-(1+r)^-N)/r

P=25*(1+0.0913%)*(1-(1+0.0913%)^-1144)/0.0913%

P = 25 * (1.000913) * (1 - (1.000913)^-1144)/0.000913

P = 25 * (1.000913) * 1 - 0.3520453/0.000913

P = 25 * (1.000913) * 709.6985

P = 17758.661368

P = $17,758.66

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