Mr Hopper Expects to Retire in 30 Years, and He

question 87

Multiple Choice

Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $1,000,000 in his retirement fund by that time. If the interest rate is 12 percent per year, how much should Mr. Hopper put into his retirement fund at the end of each year in order to achieve this goal?

• A)$4,143.66
• B)$8,287.32
• C)$4,000.00
• D)$12,483.17

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Definitions:

Dividend Growth Model

A model that estimates the value of a company's stock based on its expected future dividends and their growth rate.

Market Rate

The market rate, often referred to as the going rate, is the standard or average interest rate, wage, or price charged or paid for a specific good, service, or asset in a specific market.

Equity Securities

Financial instruments that represent ownership interest in a company or corporation, such as common stock.

Cumulative Voting

Cumulative voting is a voting system that allows shareholders to allocate their votes to one or several candidates in a way that can increase minority shareholder representation on the board of directors.