What is the future value of annuity

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For purposes of compensation, an actuary working for a lawyer estimates the annual earnings of a September 11th victim that died at the Twin Towers at age 32.

The victim was making $95,000 a year and a stream of payments for that amount would have likely accrued to him annually until retirement at age 65.

The actuary knows that this is an ordinary annuity problem. She assumes, as is usual, that the victim's salary would grow in tandem with inflation, which for years has hovered at around at 3% annually.

What is the future value of this annuity, the minimum basis for a possible settlement with the relatives of the victim, if a fair settlement were indeed on the table?

Reference no: EM132502649

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