As Jorge Starts Working Now at the Age of 23

question 197

Multiple Choice

As Jorge starts working now at the age of 23, he decides to make regular contributions to a savings account.He wants to accumulate enough by age 55 to fund an annuity of $6,900 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)$446.46
• B)$428.46
• C)$432.46
• D)$423.46
• E)$410.84

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Definitions:

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individual self-interests unintentionally benefit society as a whole.

Budgets

Financial plans detailing projected income and expenses over a specific period.

Public-sector Managers

Individuals responsible for directing, controlling, and overseeing entities in the government segment that provide public services.

Economically Efficient

A state in which resources are allocated in a way that maximizes the production of goods and services at the lowest cost, achieving optimal distribution of resources.