You Would Like to Have Enough Money Saved to Receive

question 56

Multiple Choice

You would like to have enough money saved to receive a $50,000 per year perpetuity after retirement so that you and your family can lead a good life. How much would you need to save in your retirement fund to achieve this goal (assume that the perpetuity payments starts on the day of retirement. The interest rate is 8%) ?

• A) $1,000,000
• B) $675,000
• C) $625,000
• D) None of the above

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Definitions:

Misconception

A view or opinion that is incorrect based on a misunderstanding or faulty thinking.

Culture

The shared values, traditions, norms, customs, arts, history, folklore, and institutions of a group of people that are passed down from generation to generation.

Cognitive Processes

Refers to the mental actions or operations involved in acquiring, understanding, and utilizing knowledge, such as perception, memory, and reasoning.

Vygotsky

A Russian psychologist known for his work on cognitive development, particularly the socio-cultural theory that children learn through interactions with their surrounding culture and people.