In: Finance
Your first job out of college will pay you $47,000 in year 1 (exactly one year from today), growing at a rate of 3.9% per year thereafter. You will also receive a one time bonus of $22,000 at the same time as your first salary. You plan to retire in 44 years (you'll receive 44 years of salary). If the applicable discount rate is 5%, what is the present value of these future earnings today? Round to the nearest cent.
PV of CFs = CF * PVF(r%,n)
| Year | CF | PVF @5% | Disc CF |
| 1 | $ 69,000.00 | 0.9524 | $ 65,714.29 |
| 2 | $ 48,833.00 | 0.9070 | $ 44,292.97 |
| 3 | $ 50,737.49 | 0.8638 | $ 43,828.95 |
| 4 | $ 52,716.25 | 0.8227 | $ 43,369.79 |
| 5 | $ 54,772.18 | 0.7835 | $ 42,915.44 |
| 6 | $ 56,908.30 | 0.7462 | $ 42,465.85 |
| 7 | $ 59,127.72 | 0.7107 | $ 42,020.97 |
| 8 | $ 61,433.70 | 0.6768 | $ 41,580.75 |
| 9 | $ 63,829.62 | 0.6446 | $ 41,145.14 |
| 10 | $ 66,318.97 | 0.6139 | $ 40,714.10 |
| 11 | $ 68,905.41 | 0.5847 | $ 40,287.57 |
| 12 | $ 71,592.72 | 0.5568 | $ 39,865.51 |
| 13 | $ 74,384.84 | 0.5303 | $ 39,447.87 |
| 14 | $ 77,285.85 | 0.5051 | $ 39,034.61 |
| 15 | $ 80,300.00 | 0.4810 | $ 38,625.67 |
| 16 | $ 83,431.70 | 0.4581 | $ 38,221.02 |
| 17 | $ 86,685.53 | 0.4363 | $ 37,820.61 |
| 18 | $ 90,066.27 | 0.4155 | $ 37,424.39 |
| 19 | $ 93,578.85 | 0.3957 | $ 37,032.33 |
| 20 | $ 97,228.43 | 0.3769 | $ 36,644.37 |
| 21 | $ 1,01,020.34 | 0.3589 | $ 36,260.48 |
| 22 | $ 1,04,960.13 | 0.3418 | $ 35,880.61 |
| 23 | $ 1,09,053.57 | 0.3256 | $ 35,504.71 |
| 24 | $ 1,13,306.66 | 0.3101 | $ 35,132.76 |
| 25 | $ 1,17,725.62 | 0.2953 | $ 34,764.70 |
| 26 | $ 1,22,316.92 | 0.2812 | $ 34,400.50 |
| 27 | $ 1,27,087.28 | 0.2678 | $ 34,040.12 |
| 28 | $ 1,32,043.69 | 0.2551 | $ 33,683.50 |
| 29 | $ 1,37,193.39 | 0.2429 | $ 33,330.63 |
| 30 | $ 1,42,543.93 | 0.2314 | $ 32,981.45 |
| 31 | $ 1,48,103.15 | 0.2204 | $ 32,635.93 |
| 32 | $ 1,53,879.17 | 0.2099 | $ 32,294.03 |
| 33 | $ 1,59,880.46 | 0.1999 | $ 31,955.71 |
| 34 | $ 1,66,115.79 | 0.1904 | $ 31,620.94 |
| 35 | $ 1,72,594.31 | 0.1813 | $ 31,289.67 |
| 36 | $ 1,79,325.49 | 0.1727 | $ 30,961.88 |
| 37 | $ 1,86,319.18 | 0.1644 | $ 30,637.51 |
| 38 | $ 1,93,585.63 | 0.1566 | $ 30,316.55 |
| 39 | $ 2,01,135.47 | 0.1491 | $ 29,998.95 |
| 40 | $ 2,08,979.75 | 0.1420 | $ 29,684.67 |
| 41 | $ 2,17,129.96 | 0.1353 | $ 29,373.69 |
| 42 | $ 2,25,598.03 | 0.1288 | $ 29,065.97 |
| 43 | $ 2,34,396.36 | 0.1227 | $ 28,761.46 |
| 44 | $ 2,43,537.81 | 0.1169 | $ 28,460.15 |
| PV of CFs | $ 16,05,488.76 | ||
PV of CFs is $ 1,605,488.76