Your Father Now Has $1,000,000 Invested in an Account That

question 114

Multiple Choice

Your father now has $1,000,000 invested in an account that pays 9.00%.He expects inflation to average 3%,and he wants to make annual constant dollar (real) end-of-year withdrawals over each of the next 20 years and end up with a zero balance after the 20th year.How large will his initial withdrawal (and thus constant dollar [real] withdrawals) be?

• A)$71,725.49
• B)$75,500.52
• C)$79,474.23
• D)$83,657.08

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Definitions:

Kilocalories

A unit of energy equal to 1,000 calories, commonly used to express the energy content of food.

Trophic Level

Feeding level of one or more populations in a food web.

Detritivores

Organisms that feed on dead organic material, particularly plant detritus, playing a crucial role in nutrient recycling.

Omnivores

Organisms that consume both plant and animal matter as part of their diet.