If you purchased a savings plan where, starting today, you are required to invest \$10,000 a year at the start of every year for the next twenty years. After twenty years, the savings plan guarantees a return of \$5,000 every 6 months for the next forty years. Suppose that the effective interest rates are constant at 2% over the next sixty years. What is the present value of the payouts of the savings plan?
\$64,033.87
\$21,926.04
\$29,739.01
-\$29,018.00
I made minor tweaks to the formula here: PV formula
Where C = 5000, r = 2%, n = 40, I used PV = sum of Ci/(1+0.02/2)^2*ti. But I got \$91706.06.
Any help would be appreciated.
Thank you.