QuestionSuppose that an insurance agent offers you a policy that will provide you with a yearly income of $\$ 268,000$ in 30 years. What is the comparable annual salary today, assuming an annual inflation rate of $4 \%$ (compounded annually)? (Round your answer to the nearest cent.) \$$\square$ Need Help? Read It Watch it

Studdy Solution
Calculate the present value. First, calculate the denominator:
$$(1 + 0.04)^{30} = 1.04^{30}$$
Now calculate:
$$PV = \frac{268,000}{1.04^{30}}$$
Using a calculator, compute $1.04^{30} \approx 3.2434$.
$$PV = \frac{268,000}{3.2434}$$
$$PV \approx 82,632.22$$
The comparable annual salary today, rounded to the nearest cent, is:
\$ \boxed{82,632.22}