Good news: You will almost certainly be a millionaire by the time you retire in

Question

Good news: You will almost certainly be a millionaire by the time you retire in 45 years. Bad news: The inflation rate over your lifetime will average about 2.4%. What will be the real value of $1 million by the time you retire in terms of today's dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What real annuity (in today's dollars) will $1 million support if the real interest rate at retirement is 2.6% and the annuity must last for 15 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explanation / Answer

a. Real Value of $ 1 million in terms of today's dollars will be $ 976,562.50 b. The real annuity in terms of dollars supported by $ 1 million will be $ 12,290,784.15

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