Returning
to the earlier example consider the case in which rs = 0.10, the
worker will save for 40 years and live on a monthly annuity whose inflation
adjusted value will be $1500 for 30 years, and the rate of inflation will be
ri = 0.03 for the entire lifespan of the worker/retiree. Assuming the worker
will make the first deposit in one month the present value of all deposits to
be made is