As Jorge Starts Working Now at the Age of 22

question 238

Multiple Choice

As Jorge starts working now at the age of 22, he decides to make regular contributions to a savings account.He wants to accumulate enough by age 55 to fund an annuity of $4,800 per month until age 80.
What should his monthly contributions be? Assume that both accounts pay 8.5%, compounded
Monthly.Round to the nearest cent.

• A)$274.82
• B)$265.82
• C)$261.08
• D)$270.82
• E)$288.82

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Definitions:

Leasing

A financial arrangement where one party pays another for the use of an asset for a specific time period.

Buying

The process of acquiring goods, services, or financial assets in exchange for money or other assets.

Relatively High Tax Brackets

Tax categories that are higher than average, typically applying to individuals or entities with significantly high income or profits.

Lessor Firms

Companies that lease or rent out assets or properties to others under a contractual agreement.