Assume That You Are 30 Years Old Today,and That You

question 18

Essay

Assume that you are 30 years old today,and that you are planning on retiring 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.At retirement (age 65)you will begin withdrawing equal annual payments to pay for your living expenses during retirement (on your 65th birthday).If you expect to die one day before your 101st birthday (your last withdrawal will be on your 100th birthday)and if the annual rate of return is 7%,then how much money will you have to spend in each of your golden years of retirement?

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Definitions:

Unconscious Drives

Deeply rooted instincts and motivations that influence behavior and thought processes without the individual's conscious awareness.

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their surroundings or social norms.

Scientific Method

Describes a systematic, empirical approach for investigation and acquisition of knowledge through observation, experimentation, and data analysis.

Theories; Hypotheses

Theoretical constructs are proposed explanations for phenomena, while hypotheses are testable predictions derived from theories.