If You Are Age 20, Have No Accumulated Wealth, and Have

question 36

Multiple Choice

If you are age 20, have no accumulated wealth, and have an expected average annual income of $36,000, how much should you consume each year if you want to retire at age 65 and expect to live until age 80? You desire to leave no estate and to consume an equal amount in each of the next 60 years.

• A)$36,000
• B)$31,000
• C)$27,000
• D)$22,000
• E)$20,000

---

Definitions:

Crop

Cultivated plants or agricultural produce, such as grain, vegetables, or fruit, considered as a group.

Risk Profile

An evaluation of an individual's or organization's willingness to take risks, as well as their financial capacity to bear risk.

Financial Risk

The potential for financial losses due to factors affecting an entire market or security, including market risk, credit risk, and liquidity risk.

Price Fluctuations

Variations in the prices of goods and services over time, which can be influenced by factors like supply and demand, inflation, and market sentiment.