Your Uncle Has $375,000 and Wants to Retire

question 60

Multiple Choice

Your uncle has $375,000 and wants to retire.He expects to live for another 25 years,and he also expects to earn 7.5% on his invested funds.How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account?

• A)$28,243.21
• B)$29,729.70
• C)$31,294.42
• D)$32,859.14

Recognize the major components of household assets and liabilities in the U.S.

Explain the concept of asset allocation and security selection.

Recognize the role of financial intermediaries in the economy.

Grasp the basics of risk management and the purpose of derivatives markets.

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Definitions:

Extending Credit

The practice of allowing a borrower to use resources now and pay for them later, under agreed terms.

Automobile Dealers

Businesses specializing in the sale of new or used cars and possibly offering maintenance services and spare parts.

Fair Credit Billing Act

A U.S. law designed to protect consumers from unfair billing practices and provides a mechanism for addressing billing errors on credit card statements.

Errors In Credit Card Billings

Mistakes or inaccuracies in the billing statements of credit card accounts, which can range from unauthorized charges to incorrect amounts charged.