A Financial Advisor Tells You That You Can Make Your

question 58

Multiple Choice

A financial advisor tells you that you can make your child a millionaire if you just start saving early.You decide to put an equal amount each year into an investment account that earns 7.5% interest per year,starting on the day your child is born.How much would you need to invest each year (rounded to the nearest dollar) to accumulate a million for your child by the time he is 35 years old? (Your last deposit will be made on his 34^th birthday.)

• A)$6,525
• B)$7,910
• C)$12,500
• D)$20,347

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Definitions:

Shares

Units of ownership in a corporation or financial asset, representing a portion of the company and conferring certain rights and liabilities to the shareholder.

Partnership

A legal arrangement where two or more individuals engage in business together, sharing profits, liabilities, and decision-making.

Close Corporations

Businesses characterized by a small number of shareholders, no public shares, and often more relaxed corporate governance standards.

Flexibility

The quality of being adaptable or variable in order to accommodate different circumstances or needs.