MsLloyd, Who Is 25 and Expects to Retire at Age

question 9

Multiple Choice

Ms.Lloyd, who is 25 and expects to retire at age 60, has just been hired by the Chambers Corporation.Ms.Lloyd's current salary is $30,000 per year, but her wages are expected to increase by 5 percent annually over the next 35 years.Chambers has a defined benefit pension plan in which workers receive 2 percent of their final year's wages for each year of employment.Assume a world of certainty.Further, assume that all payments occur at year-end.What is Ms.Lloyd's expected annual retirement benefit, rounded to the nearest thousands of dollars?

• A) $35,000
• B) $57,000
• C) $89,000
• D) $116,000
• E) $132,000

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Definitions:

Keynesian Economic

An economic theory advocating for government interventions to influence demand through fiscal and monetary policies.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s to respond to the Great Depression.

American Big Business

Large-scale, corporate enterprises that emerged in the United States during the 19th and early 20th centuries, often characterized by monopolistic practices, significant economic power, and influence over government policies.

Defense Industry

An industry involved in the production of technology, equipment, and services for the purpose of national defense and security.