Question

judy hired an attorney to sue the insurance company in an attempt to get the insurance company to honor her claim. you have been hired to help in this litigation. judy was 49 years old at the time of the accident, and she just turned 52 last the average annual earnings growth rate for judy through year 12 was six percent. what is judy's estimated damage for year 13 only?

Answer 1

To estimate Judy's damage for year 13, we can calculate her total earnings growth rate over the 3-year period using the average annual earnings growth rate of 6%.

Step-by-step explanation:

Judy's estimated damage for year 13 can be calculated using the average annual earnings growth rate and her age at the time of the accident. Since Judy was 49 years old at the time of the accident and just turned 52, we can calculate the number of years between the accident and year 13 as (52-49) = 3 years.

To estimate Judy's earnings in year 13, we need to calculate the total growth rate over the 3-year period. Using the average annual earnings growth rate of 6%, we can calculate the total growth rate as 1.06^3 = 1.1910. Finally, to calculate Judy's estimated damage for year 13, we multiply her average annual earnings by the total growth rate: Judy's estimated damage for year 13 = (Average annual earnings) * (Total growth rate) = (Average annual earnings) * 1.1910.