Reference no: EM131873852

You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testify that it will be five years before the plaintiff can return to work. The jury has already decided in the favor of the plaintiff. You have decided that you will award the plaintiff an award equal to the sum of (a) the present value of two years' back pay, which would have been $41,000 and $43,000 two and one years ago, (b) the present value of five years' future salary, expected to be $48,000 per year, (c) $100,000 today for pain and suffering and (d) $20,000 for court costs. Assume the salary payments are in equal amounts paid at the end of each month. If the rate of return you choose is an 8% APR, what is the present value of the award? As a plaintiff, would you like a higher or lower rate of return?