Judy Would Like to Have $200,000 Saved in Her Retirement

question 61

Essay

Judy would like to have $200,000 saved in her retirement account in 20 years.At an interest rate of 10 percent,how much should she contribute each year?
(a)$3,491.92
(b)$2,000.00
(c)$2,576.11
(d)$4,376.77

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Definitions:

Marginal Investor

An investor whose actions might influence the market price of a security and who is typically sensitive to changes in risk levels or return.

Required Rate

The minimum return an investor expects to achieve by investing in a particular asset, also known as the required rate of return.

Expected Rate

The return that an investor anticipates or estimates will be achieved over a certain period on an investment.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.