Mrs. Sippy (age 65) is about to begin receiving a CPP retirement pension of $11,000per year. This pension is indexed to the Consumer Price Index (CPI). Assume that the annual pension will be paid in a single year-end payment, the CPI will rise 3% per year, and money is worth 6% compounded annually. What is the current economic value of:
a) 20 years of pension benefits?
b) 25 years of pension benefits?

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The Answer of Mrs. Sippy (age 65) is about to begin receiving a CPP retirement pension of $11,000per year. This pension is indexed to the Consumer Price Index (CPI). Assume that the annual pension will be paid in a single year-end payment, the CPI will rise 3% per year, and money is worth 6% compounded annually. What is the current economic value of:
a) 20 years of pension benefits?
b) 25 years of pension benefits?

Mrs Sippy (Age 65) Is About to Begin Receiving a CPP