CRPC EXAM EVALUATED QUESTIONS AND ANSWERS

CRPC EXAM EVALUATED QUESTIONS AND ANSWERS Richard wants to have an annual retirement income of $100,000 (payable at the beginning of each year) protected against 3% inflation. Assuming a 7% after-tax rate of return and a retirement period of 30 years, how much money (rounded) does Richard need in order to meet his goal? - CORRECT ANSWER -B) $1,822,043 To determine how much money Richard needs, calculate the inflation-adjusted rate of return: (1.07 1.03) - 1 100 = 3.8835. Next, clear your calculator and set it to begin mode. Enter the following known values in any order: 100,000, +/-, PMT; 3.8835 I/YR; 30, N; and request the unknown PV (PVAD). This will give you the correct answer, $1,822,043 (rounded). Tom has been promised a stream of $40,000 annual payments at the end of each year for 25 years. The present value of these payments discounted at a rate of 5% equals which one of the following amounts? A) $563,758 B) $666,542 C) $610,224 D) $591,946