Your Uncle Has $375,000 and Wants to Retire

question 14

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
• E)$34,502.10

---

Definitions:

Multiplier

In economics, a factor by which an initial change in spending will alter total economic output due to follow-on effects.

Inflationary Gap

A situation where the total demand in an economy exceeds the total supply at the current price level, often leading to inflation.

Equilibrium GDP

The level of Gross Domestic Product where aggregate supply equals aggregate demand, indicating a balance in an economy's output and expenditures.

Full Employment GDP

The total market value of all final goods and services that could be produced in a year at full employment.