Q 6A 2017 AM - Individual PM

Previous 12m living expenses: 400,000

Expected to grow at inflation this year and each future year.

So calculating coming year’s expenses requires multiplying with 1.025 twice, once for current year and once again for the coming year, right??

CFAI doesn’t think so… multiplies once only

Can someone explain please

Previous Year 2017

Coming Year 2018

So needs multiplication by 1.025 ONLY 1 time!

You are at NOW



DRAW A TIMELINE too … if that helps!

Previous 12 months: Jan 2017 through Dec 2017.

Coming year: Jan 2018 through Dec 2018.

Increase by 2.5% once.

Thanks chaps

It was simpler than I thought

My pleasure.