Your Finance Professor Suggests That You Should Have $3,000,000 in Your

question 69

Multiple Choice

Your finance professor suggests that you should have $3,000,000 in your retirement portfolio before you even THINK about retiring.Recently,your aunt sold valuable California real estate and handed you a check for $387,500.(This is the amount you have after paying taxes.She is now your favorite aunt.) How much of the $387,500 must you set aside today if you invest a portion of the money at an annual rate of 7.5% and you wish to retire in 38 years with the amount suggested by your finance professor?

• A)$169,086
• B)$192,132
• C)$306,187
• D)At an annual rate of return of 7.5.0%,$387,500 is not a large enough investment to reach the goal amount of $3,000,000 in 38 years.

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Definitions:

Partial Worksheet

A tool in accounting that shows a portion of the ledger accounts for a specific purpose, not a full financial statement.

Adjusted Trial Balance

The adjusted trial balance is a list of all the accounts of a company, showing the balances after adjustments have been made for accruals, prepayments, depreciation, and other accounting adjustments.

Unadjusted Trial Balance

A list of all the general ledger accounts along with their balances at a particular date before any adjustments are made for the end-of-period accounting.

Adjustments Columns

Columns in a worksheet used to record entries for the adjustment of accounts at the end of a period, prior to preparing financial statements.