The Motley Fool Discussion Boards

Previous Page  
Investing/Strategies / Retirement Investing 

URL:
http://boards.fool.com/1015jaboaquotigetthesamenumberas11378208.aspx


Subject: Re: Pension figured into Networth???  Date: 10/15/1999 4:18 PM  
Author: JAFO31  Number: 14584 of 77150  
10/15 JABoa: "I get the same number as GrayWulff. Just to be explicit (and the assumption is different from JAFO's which has declining payments), you want to calculate the principal which, invested at 6%, will produce an income stream of $45,000 a year for 30 years." I guees I was not clear, I was not assuming declining payments but do very abbrievated present value calculations. <<<<Assuming beginning of year payment, then first year alone is 45k present value, second year is roughly $42,450 present value [45,000 1 year from now is worth roughly 42,450 when discounted at 6%], and third year is roughly 40k present value for a 3 year total of 127,450 present value; the remaining 27 years must be worth more than $7,200 present value. Even assuming end of year payments, I doubt value would drop that low. 1st year 45k 2nd year 45,000/1.06 3rd year 45,000/1.06^2 etc. . . . 30th year 45,000/1.06^29>>>> 

Copyright 19962015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us 