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Hello, in this video i will be explaining the following.
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So we have two plans that you can use for retirement.
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And we want to know what is the expected present discounted value of each of these plans if interest rate is 1%.
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So let's go ahead and start calculating.
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So the expected future value of plan i or 1 at 1 % after tax.
00:28
So plan 1 at 1 % after.
00:41
Okay, so let's go ahead and start the calculations.
00:49
So we know that this is going to be found by doing the amount to save today times 100 % plus the interest rate.
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And it's to the number of years.
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So let's keep going.
01:39
Now we can just plug in those numbers that we know.
01:46
Oh, let me move, because there's more to this.
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To the number of years times 100 % minus the tax rate.
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Now, yes, okay, so now we can put in all of the numbers that we know, and that's going to be that 2 ,000 times that 100%, plus the interest rate of 1 % times 100 % minus 100%.
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25%.
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So that's going to give us $2 ,333 .30.
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So now that is the plan i, that's the future value.
02:58
And now we need to know the expected present discounted value...