You Are Depositing $1,500 in a Retirement Account Today and Expect

question 62

Multiple Choice

You are depositing $1,500 in a retirement account today and expect to earn an average return of 7.5 percent on this money.How much additional income will you earn if you leave the money invested for 45 years instead of just 40 years?

• A)$10,723.08
• B)$11,790.90
• C)$12,441.56
• D)$12,908.19
• E)$13,590.93

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Definitions:

Negative Externalities

These are costs that are suffered by a third party as a result of an economic transaction, which are not reflected in the market price.

Positive Externalities

Benefits that are enjoyed by a third-party or the society at large as a result of an economic transaction.

Optimal Output

The level of production at which a firm or economy can produce goods at the lowest average cost, maximizing efficiency.

Government

The system or group of people governing an organized community, often a state, and the mechanisms and institutions through which they rule.