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question 74

Essay

Use the information for the question(s)below.
Assume that you are 30 years old today and that you are planning on retirement at age 65.Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work.To save for your retirement,you plan on making annual contributions to a retirement account.Your first contribution will be made on your 31st birthday and will be 8% of this year's salary.Likewise,you expect to deposit 8% of your salary each year until you reach age 65.Assume that the rate of interest is 7%.
-The future value at retirement (age 65)of your savings is:

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by changes in real GDP.

Population Decline

A decrease in the number of people in a population due to factors such as lower birth rates, higher death rates, or migration.

Technology

The application of scientific knowledge for practical purposes, especially in industry and in the development of innovations.

Labor Productivity

A measure of economic performance that compares the amount of goods and services produced with the hours worked to produce them.