Your Aunt Is Evaluating Her Retirement Pension

question 99

Multiple Choice

Your aunt is evaluating her retirement pension.She can retire at age 65 and collect $1,000 per month for the rest of her life.Assume that payments begin one month after her 65^th birthday.If your aunt lives to be exactly 80 years old and can earn 7% interest (compounded monthly) ,what is the equivalent lump sum she would need at retirement to equal the value of the pension?

• A) $106,906
• B) $111,256
• C) $115,313
• D) $215,027

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Definitions:

Festivities

Social events or gatherings, often celebrating particular holidays, cultures, or events, that involve various forms of entertainment and activities.

Group Pressure

The influence exerted by a group on its members to align their attitudes, beliefs, or behaviors with the group norms.

Solomon Asch

He was a psychologist best known for his research on conformity, showing how individuals often conform to the opinions of the majority even when they are contrary to their own beliefs.

Conformity

The act of matching attitudes, beliefs, and behaviors to what is perceived as social norms.