Mr Moore Is 35 Years Old Today and Is Beginning

question 45

Multiple Choice

Mr. Moore is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each of the next 25 years so that he can retire at age 60. He expects to live to the maximum age of 80 and wants to be able to withdraw $25,000 per year from the account on his 61st through 80th birthdays. The account is expected to earn 10 percent per annum for the entire period of time. Determine the size of the annual deposits that must be made by Mr. Moore.

• A) $212,850
• B) $23,449
• C) $2,164
• D) $8,514

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Contract Law

The body of law that governs the formation, execution, and enforcement of contracts between parties.

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Contracts between an insurer and a policyholder that provide financial protection and compensation for specific losses in return for premiums paid.

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A type of insurance policy where the value of the insured item is agreed upon at the time the policy is issued, and this amount is paid out in the event of a total loss.