When determining core capital, they take the sum of the present values for the product of Real Annual Spending X Expected Real Spending. The question is in the book, Real Annual Spending is adjusted for inflation each year but in Exam book Volume I Exam 3 Morning Session Question 3, The Real Annual Spending is held constant (no adjustment for inflation ie: $150,000 every year). I went to a review in Chicago but he didn’t spend too much time on this so I didn’t ask if it mattered for the test. Does anyone know if either way will do? I inflated it and obviously got the wron answer b/c they did not inflate the Real Annual spending on the test question… Any thoughts would help. Thanks