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Hi Jaywill,JayWill wrote:It’s how you determine the amount of benefits an employee earns each year, and represents periodic current service costs to the plan. Yes it’s in the curriculum.
Hi, I don’t have the Kaplan study guide so I can’t see the question you’re referring to, but assuming $2,563.30 are the annual payments an employee would receive in retirement, you need to find the PV of those payments using your calculator and the given discount rate. N = 15, I/Y = (?), PMT = $2,563.30, CPT PV. Then you take that value and divide by the number of years until retirement (which seems to be 23 in your question).dududu100 wrote:
Hi Jaywill,JayWill wrote:It’s how you determine the amount of benefits an employee earns each year, and represents periodic current service costs to the plan. Yes it’s in the curriculum.
What you said made sense. Am just curious for the example in Kaplan book page 98 of the account book. They used “PV of 15 payments of $2,563.30 beginning in 23 years” to calculate the Currecnt service cost. I just cannot use the same method in the mock for the Kaplan exaple with the “present value divided by 23 years” to find the same value. Can you help explain why the two approches differ?
Thank you!
You bet. Best of luck on the exam.dududu100 wrote:
I see now!!!! Kaplan should have mentioned this in the book so that I didnt need to spend a over a couple of hours on this. Maybe they think this is not important… But this is defitniely great to know.
Thank you for your help!