An employee, who is less than 10 years away from average retirement age, was injured on the

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Question:

An employee, who is less than 10 years away from average retirement age, was injured on the job and successfully sued his employer. You are the foreperson of the jury who must decide on the financial award to be received by the employee. Your jury has decided to award the following:

a) Two years lost pay (2 yrs ago: $60,000 and last year: $63,000)
b) Five years future salary at an average of $66,000 per year.
c) $200,000 for pain and suffering, and
d) $40,000 to cover his court costs.

(Assume wages are paid monthly at the end of the month.)

Required:

a) If the annual effective interest rate is 4%, what is the size of the settlement today? (Timeline required)