Sign up  |  Log in

CFA book page 437 / Reading 14 Risk Management for individuals

Under capital needs , can somebody explain how they got -398565 figure as an inflow?

The best just got better. Schweser's upgraded content and redesigned study platform are exactly what you need to pass the Level III exam. Save 10% when you preorder a Premium Package for a limited time.

There’s a footnote at the end of the table on the top of page 438 that explains the calculation. Essentially, its her income after she goes back to work full time, it’s two steps. You calculate the annuity due to get a PV of 649,220 needed in 10 years. You then have to discount that back to present at the unadjusted 5% rate. It’s the income she gets after her kids are no longer her responsibility, so doesn’t start for 10 years.