The numbers used in the Trust Funds Model from this lesson are, of course, just estimates....

The numbers used in the Trust Funds Model from this lesson are, of course, just estimates. Let’s investigate what happens if these estimates are off by 10%. To do so, answer the following questions:

Using a starting value of $3 trillion in the trust funds in 2032, with an annual rate of decline of 8.7%, how much money will be in the funds in 2040? The answer is 1448

Now let us assume the starting value of the funds was 10% less and the rate of decline was 10% greater than was estimated in the lesson. What is the estimated value of the trust funds in 2040? I need help with this specific question only. Thanks

Solutions

Expert Solution

Note:- once again I repeat that, here *the annual percentage rate is 10% greater than the previous* means that the numerical value of the rate is increased by 10% as done above. It doesn't mean that (8.7% + 10%)= 18.7%

If there is any mistake. Kindly comment, i will definitely correct myself. Hope this will help you. Thank you.

Colby Messinger answered 1 year ago

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