You Are Saving for Retirement

question 26

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.If you assume you are able to do that,and will live 20 more years (until age 85) ,the amount you can withdraw at the end of each of those years at an interest rate of 5% before your retirement fund is empty is closest to:

• A)$72,987.
• B)$75,606.
• C)$197,987.
• D)$200,606.

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Definitions:

Budgeted Amounts

planned financial values or targets for revenues, expenses, assets, liabilities, and equity accounts.

Direct Materials

Raw materials that are directly traceable to the production of a specific product or service.

Direct Labor

The wages and benefits of employees who are directly involved in the production of goods or services.

Fixed Overhead

Regular, ongoing expenses in dictated business operations, such as rent and salaries, that do not vary with production levels.