Don Turned 60 Years Old Today and Has Retired from Hydro

Don turned 60 years old today and has retired from Hydro One. Current economic value of his pension is his significant asset. He will be receiving pension payments of $84 000 every year. Based on a 22-year life expectancy and money worth 8% compounded annually and money depreciating at 2% annually, calculate the current economic value of Don's pension.

A) $740 932
B) $877 326
C) $1 001 884
D) $1 234 888
E) $832 256

Correct Answer:

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