Crane Ltd. initiated a one-person pension plan in January 2015 that promises the employee a...
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Crane Ltd. initiated a one-person pension plan in January 2015 that promises the employee a pension on retirement according to the following formula: pension benefit =2.9% of final salary per year of service after the plan initiation. The employee began employment with Crane early in 2015 at age 33 and expects to retire at the end of 2041, the year in which he turns 60 . His life expectancy at that time is 21 years. Assume that this employee earned an annual salary of $45,500 when he joined Crane, that his salary was expected to increase at a rate of 2% per year, and that this remains a reasonable assumption to date. Crane considers a discount rate of 8% to be appropriate. (a) Z Your answer is incorrect. What is the employee's expected final salary? (Round your answer to 0 decimal places, e.g. 5,275.)
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