Company pay each year to fully fund the pension liability

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1. A pension fund will owe $10 million to retirees in 6 years. An actuary assumes an 8% rate of return on the funds invested in the pension plan. If the pension plan receives annual contributions from the company sponsor, how much must the company pay each year to fully fund the pension liability?

$1,212,587

$1,363,154

$1,666,667

$1,533,333

show calculation

2. Marsha can purchase goods for her store on credit terms of 3/10, net 24. What is the effective annual rate that Marsha will pay if she foregoes the discount on a purchase of $10,300?

101.90 percent

157.73 percent

92.65 percent

121.25 percent

Reference no: EM132020469

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