Your Client Has Been Given a Trust Fund Valued at $1

question 33

Multiple Choice

Your client has been given a trust fund valued at $1 million. She cannot access the money until she turns 68 years old, which is in 12 years. At that time, she can withdraw $30,000 per month. If the trust fund is invested at a 7 percent interest rate, how many months will it last your client once she starts to withdraw the money?

• A) 77.05 months
• B) 81.05 months
• C) 99.05 months
• D) 119.05 months

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Definitions:

Ratio

A quantitative relationship between two numbers showing the number of times one value contains or is contained within the other.

F-test Statistic

A value used in statistics to compare two variances and determine if they are significantly different, often used in the analysis of variance (ANOVA) tests.

Calculated

The result obtained from mathematical or statistical operations on data or values.

Test Statistic

A calculated value from sample data used in hypothesis testing to determine whether to reject the null hypothesis.