This Afternoon, You Deposited $1,000 into a Retirement Savings Account

question 31

Multiple Choice

This afternoon, you deposited $1,000 into a retirement savings account. The account will compound interest at 6 percent annually. You will not withdraw any principal or interest until you retire in 40 years. Which one of the following statements is correct?

• A) The interest you earn in Year 6 will equal the interest you earn in Year 10.
• B) The interest amount you earn will double in value every year.
• C) The total amount of interest you will earn will equal $1,000 × .06 × 40.
• D) The present value of this investment is equal to $1,000.
• E) The future value of this amount is equal to $1,000 × (1 + 40).⁰⁶.

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Definitions:

Norway And Sweden

Scandinavian countries known for their high standards of living, extensive welfare systems, and progressive policies.

Co-Custody

A legal arrangement where two parties share the responsibility and authority to make decisions about a child's upbringing.

Economic Burdens

Economic burdens are financial strains or pressures faced by individuals, families, or societies due to various factors such as debt, unemployment, or healthcare costs.

Child Support

Financial contributions ordered by a court for the expenses associated with raising a child, typically paid by the non-custodial parent to the custodial parent.