You Would Like to Have Enough Money Saved to Receive

question 73

Multiple Choice

You would like to have enough money saved to receive a growing annuity for 20 years, growing at a rate of 5% per year, the first payment being $50,000 after retirement. That way, you hope that you and your family can lead a good life after retirement. How much would you need to save in your retirement fund to achieve this goal.(assume that the growing annuity payments start one year from the date of your retirement. The interest rate is 10%) ?

• A) $1,000,000
• B) $425,678.19
• C) $605,604.20
• D) None of the above

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Definitions:

Test-tube Method

A technique often associated with laboratory experiments or procedures conducted in vitro, such as the cultivation of microorganisms or cells in a test-tube.

Reproduction

The biological process by which new individual organisms are produced from their parents.

Age Grades

Social categorization based on age, often used in traditional societies to organize individuals into groups with similar responsibilities and rites of passage.

Age Classes

Categories or divisions in a society based on age, used to organize individuals into roles, responsibilities, and social expectations appropriate to their stages in life.