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You Are Saving for Retirement

question 32

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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:


Definitions:

Marginal Revenue Product

The additional revenue generated from using one more unit of a resource.

Additional Revenue

The increase in income received from selling one more unit of a product or service.

Additional Unit

The next unit of production, referring to the increase in quantity by one unit.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production, such as labor or capital.

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