Question

Your employer contributes $50 a week to your retirement plan. Assume that you work for your employer for another 20 years and that the applicable discount rate is 9 percent. Given these assumptions, what is this employee benefit worth to you today?

Answer 1

Answer:

Present value of contributions is $24,106.15

Step-by-step explanation:

Weekly rate=9%/52weeks= 0.173%

Weekly contributions $50

Number of weeks=20years×52weeks=1040

Present value of contribution=$50(1-[(1+9%/52)^-1040 /(9%/52)

Present value of contribution= $24,106.15