How large a cheque must the city write on december

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Problem

It is now December 31, 2021, and a jury just found in favour of a woman who sued the city for injuries sustained in a January 2020 accident. She requested recovery of lost wages, plus $250,000 for pain and suffering, plus $40,000 for her legal expenses. Her doctor testified that she has been unable to work since the accident and that she will not be able to work in the future. She is now 62, and the jury decided that she would have worked for another 3 years. She was scheduled to have earned $45,000 in 2020, and her employer testified that she would probably have received raises of 3% per year. (Assume for simplicity that the salary would have been paid at year end.) The actual payment will be made on December 31, 2022. The judge stipulated that all dollar amounts are to be adjusted to a present value basis on December 31, 2022, using a 7% annual interest rate, using compound, not simple, interest. Furthermore, he stipulated that the pain and suffering and legal expenses should be based on a December 31, 2021, date. Get the instant assignment help. How large a cheque must the city write on December 31, 2022?

Reference no: EM133910977

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