Assume That Two People Save $100 Per Month (The Same

question 53

Multiple Choice

Assume that two people save $100 per month (the same for both) and earn exactly the same positive annual interest rate of 2%.Also assume that one of them started saving at 20 years old,while the other stared saving at 40 years old.Which statement is correct?

• A) On their 60th birthday, the one who started saving later would have exactly half as much as the one who began saving earlier.
• B) On their 60th birthday, they would both have the same amount.
• C) On their 60th birthday, the one who started saving later would have less than half the amount that the one who began saving earlier has.
• D) On their 60th birthday, the one who started saving later would have received a larger real interest rate, but not enough to "catch up" to the one who began saving earlier.
• E) On their 60th birthday, neither would have anything if inflation had been negative during the period.

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Genus

A class or group of entities that share common characteristics, often used in biology to classify organisms but also applicable in logic and philosophy.