Question

Your first job out of college will pay you $52,000 in year 1 (exactly one year from today), growing at a rate of 3.6% per year thereafter. You will also receive a one time bonus of $29,000 at the same time as your first salary. You plan to retire in 42 years (you'll receive 42 years of salary). If the applicable discount rate is 6%, what is the present value of these future earnings today? Round to the nearest cent.

Answer 1

PV = CF * PVF(r%, n)

Year	CF	PVF @6%	Disc CF
1	$    81,000.00	0.9434	$       76,415.09
2	$    53,872.00	0.8900	$       47,945.89
3	$    55,811.39	0.8396	$       46,860.32
4	$    57,820.60	0.7921	$       45,799.33
5	$    59,902.14	0.7473	$       44,762.37
6	$    62,058.62	0.7050	$       43,748.88
7	$    64,292.73	0.6651	$       42,758.34
8	$    66,607.27	0.6274	$       41,790.22
9	$    69,005.13	0.5919	$       40,844.03
10	$    71,489.32	0.5584	$       39,919.26
11	$    74,062.93	0.5268	$       39,015.43
12	$    76,729.20	0.4970	$       38,132.06
13	$    79,491.45	0.4688	$       37,268.69
14	$    82,353.14	0.4423	$       36,424.87
15	$    85,317.85	0.4173	$       35,600.16
16	$    88,389.30	0.3936	$       34,794.12
17	$    91,571.31	0.3714	$       34,006.33
18	$    94,867.88	0.3503	$       33,236.37
19	$    98,283.12	0.3305	$       32,483.85
20	$ 1,01,821.31	0.3118	$       31,748.37
21	$ 1,05,486.88	0.2942	$       31,029.54
22	$ 1,09,284.41	0.2775	$       30,326.98
23	$ 1,13,218.65	0.2618	$       29,640.33
24	$ 1,17,294.52	0.2470	$       28,969.23
25	$ 1,21,517.12	0.2330	$       28,313.32
26	$ 1,25,891.74	0.2198	$       27,672.27
27	$ 1,30,423.84	0.2074	$       27,045.72
28	$ 1,35,119.10	0.1956	$       26,433.37
29	$ 1,39,983.39	0.1846	$       25,834.88
30	$ 1,45,022.79	0.1741	$       25,249.94
31	$ 1,50,243.61	0.1643	$       24,678.24
32	$ 1,55,652.38	0.1550	$       24,119.49
33	$ 1,61,255.86	0.1462	$       23,573.39
34	$ 1,67,061.08	0.1379	$       23,039.65
35	$ 1,73,075.27	0.1301	$       22,518.00
36	$ 1,79,305.98	0.1227	$       22,008.15
37	$ 1,85,761.00	0.1158	$       21,509.86
38	$ 1,92,448.40	0.1092	$       21,022.84
39	$ 1,99,376.54	0.1031	$       20,546.85
40	$ 2,06,554.09	0.0972	$       20,081.64
41	$ 2,13,990.04	0.0917	$       19,626.96
42	$ 2,21,693.68	0.0865	$       19,182.58
PV of CFs			$ 13,65,977.20