The Inflation Rate Is a Constant 3% a Year and the Nominal

question 15

Multiple Choice

The inflation rate is a constant 3% a year and the nominal interest rate is a constant 6% a year. How much must you have in your retirement account today if you want to make withdrawals
Of $60,000 a year, quoted in today's dollars, each year for the next 30 years? Round your answer
To the nearest $10,000.

• A)$830,000
• B)$1,190,000
• C)$1,940,000
• D)$1,750,000

---

Definitions:

Corporation

A legal entity distinct from its owners, possessing rights to own property, incur debts, sue and be sued.

Partnership

A legitimate business structure involving two or more people who jointly manage and benefit from the profits.

Generally Accepted Accounting Principles

A set of accounting standards and practices that are used in the preparation of financial statements in the United States.

Procedures

The official or established way of doing something, often detailed through a series of steps or actions to be taken.