You Want to Have $2 Million in Real Dollars in an Account

question 110

Multiple Choice

You want to have $2 million in real dollars in an account when you retire in 35 years. The nominal return on your investment is 9.94 percent and the inflation rate is 3.2 percent. What is the real amount you must deposit each year to achieve your goal?

• A) $20,403
• B) $7,482
• C) $16,017
• D) $18,887
• E) $19,711

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Definitions:

LLP

Limited Liability Partnership, a legal structure for businesses where partners have limited liabilities, protecting personal assets from business debts.

Creditor

An individual or institution to whom money is owed by a debtor.

Damages Award

A financial compensation ordered by a court to be paid to a plaintiff by the defendant as restitution for loss or injury.

Furtherance

An action taken to advance or promote a particular cause, objective, or interest.