Approximately How Much Should Be Accumulated by the Beginning of Retirement

question 71

Multiple Choice

Approximately how much should be accumulated by the beginning of retirement to provide a $2,500 monthly check that will last for 25 years, during which time the fund will earn 8 percent interest with monthly compounding?

• A)$261,500.00
• B)$323,800.00
• C)$578,700.00
• D)$690,000.00 PV = $2,500
• = $2,500 [149.925-20.405]
• = $2,500 [129.52]

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Definitions:

Asset Exchange Transaction

A transaction where one asset is given up in exchange for another asset, with both having a measurable fair value.

Acquired Assets

Assets obtained through purchase or merger by a company.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset's book value is reduced over time, reflecting quicker loss of value.

Straight-Line Depreciation

A technique for apportioning the price of a physical asset over its effective duration in steady annual portions.