In 2009 exam, is the inflation added onto the return only because they are 59 and retiring in a year?
If they were 60 and "just retired", would you exclude inflation or would it be the same calc?作者: Analyze_This 时间: 2011-7-13 15:12
Depends on what year calculation they're asking for. If they wanted the return at retirement and they retire at 60, inflation isn't needed.
NO EXCUSES作者: thommo77 时间: 2011-7-13 15:12
and if they were 58, would you multiply by (1+inf)^2作者: zwjy 时间: 2011-7-13 15:12
Depends, I've seen problems where some income/expenses are inflation indexed and some aren't. I break everything out into a table so the grader can clearly see what I'm doing.
NO EXCUSES作者: pennyless 时间: 2011-7-13 15:12
assume item set says they want inflation adjusted returns作者: mar350 时间: 2011-7-13 15:12
Then you adjust for inflation, give them the return they are asking for.
NO EXCUSES作者: skycfa 时间: 2011-7-13 15:12
there was a trick there. They said the first payment to be deducted immediately. That reduced the assets. I missed that. 4200000 becomes 4000000
So you're left with next year , which is 2.5% more i.e. 205,000
Watch the words carefully, they are just out to fool you , really straight and simple
Edited 1 time(s). Last edit at Thursday, June 2, 2011 at 12:20AM by janakisri.作者: Analti_Calte 时间: 2011-7-13 15:12
so in other words, since you are deducting living expenses right away, your "first year" living expenses are essentially your "second year"?
