Final answer:
To find the present value of the promised future retirement payments, use the formula for present value and substitute the given values. The state will have to pay approximately $36,573,892.09 before it can start a new pension plan.
Step-by-step explanation:
To find the present value of the promised future retirement payments, we can use the formula for present value. The formula is:
Present Value = Future Value / (1 + Discount Rate)Number of Periods
Given that there are 240,000 current employees, each average employee is 22 years away from retirement, and the average promised future retirement benefit is $400,000, we can substitute these values into the formula:
Present Value = $400,000 / (1 + 0.55)22
Calculating this using a calculator or spreadsheet software, the state will have to pay approximately $36,573,892.09 before it can start a new pension plan.