William Wishes to Save Enough Money to Purchase a Retirement

question 89

Multiple Choice

William wishes to save enough money to purchase a retirement lake cabin.He is willing to spend $200,000 for the cabin and he can save $20,000 per year and invest the money into an account earning 7.00% per year.If his investments come in the form of equal annual end-of-the-year cash flows and the first cash flow is in exactly one year,how long will it take him to save enough money to buy the lake cabin?

• A)Between 7 and 8 years
• B)Between 9 and 10 years
• C)Between 10 and 11 years
• D)Exactly 10 years

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Definitions:

Essential Fatty Acids

These are fatty acids that the body cannot produce on its own and must be obtained through diet; crucial for various bodily functions, including cell membrane integrity and inflammatory response regulation.

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Diabetes

A chronic condition characterized by high blood sugar levels resulting from the body's inability to produce or use insulin effectively.

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