In CFAI text, p. 121, they say that a 20 year pension, 7%, $4242 payable @ beg of each year is worth $48,086 at retirement (PV) … I did the PV calc on my calculator and I am getting 44,939.81 as the PV. I think it has something to do with the fact that it’s paid at the beginning of the year but could anyone help out as to how you arrive at the $48,086 figure? TIA!
beg of period so multiply by 1.07 44939.81 * 1.07 = 48085.5967 or use begin mode on your calc. CP
i got 48,085.6
ahhh. thanks!