You Are Saving for Retirement

question 32

Multiple Choice

You are saving for retirement.To live comfortably,you decide that you will need $2.5 million by the time you are 65.Today is your 30th birthday,and you decide,starting today,and on every birthday up to and including your 65th birthday,that you will deposit the same amount into your savings account.Assuming the interest rate is 5%,the amount that you must set aside each year on your birthday is closest to:

• A)$71,430.
• B)$27,680.
• C)$26,100.
• D)$26,260.

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Definitions:

System Justification

System Justification is a theory in social psychology that describes the tendency of people to justify and defend the status quo, even if it is at odds with their own interests or fairness.

Hindsight Bias

A bias towards believing one would have known the outcome in advance after an event is concluded.

Social Influence

The impact that individuals or groups have on a person's attitudes, beliefs, decisions, or actions through direct or indirect means.

Memorable Characteristics

Distinctive features or qualities of something or someone that make them easily remembered.