How Much Must Be Saved Annually, Beginning One Year from Now

question 103

Multiple Choice

How much must be saved annually, beginning one year from now, in order to accumulate $50,000 over the next 10 years, earning 9 percent annually?

• A)$3,291
• B)$3,587
• C)$4,500
• D)$4,587 $50,000 = pmt
• = pmt
• = pmt [15.1929]

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Definitions:

Income

Sums of money attained, usually on a fixed schedule, from work or investment undertakings.

Interest Rate

The proportion at which principal loaned money is repaid with interest to the lender over time, usually as an annual rate.

Utility Function

A mathematical representation that ranks individuals' or entities' preferences over a set of goods or outcomes.

Consumption

The act of consuming goods and services either by individuals or society as a whole, central to economic analysis of demand and spending.