John Adams Plans to Retire at the Age of 62

question 36

Multiple Choice

John Adams plans to retire at the age of 62.He wants an annual income of $60,000 per year.John is currently 45 years of age.How much does he have to place at the end of each year into a retirement account earning 15 percent per year in order to have an adequate retirement nest egg at age 62? He believes that he will live to be 87 and plans to earn 12 percent during retirement.He will draw the money at the beginning of each year.

• A)$11,077
• B)$6,758
• C)$9,890
• D)$7,764

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Definitions:

Notes Receivable

Claims against others for money, goods, or services evidenced by promissory notes that are to be paid within a certain period of time.

Bank Reconciliation

is a process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Bank Reconciliation

The process of comparing a company's bank account balance with its financial records to identify any discrepancies.

Service Charges

Fees charged by a company for providing a particular service to its customers.