Assume That You Are 30 Years Old Today, and That

question 41

Multiple Choice

Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $40,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 10%. The future value (FV) at retirement (age 65) of your savings is closest to ________.

• A)$722,766
• B)$1,445,531
• C)$1,011,872
• D)$1,590,084

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Definitions:

Chamomile

An herb often used in teas, known for its calming effects and potential benefits for sleep and digestion.

Valerian

A herb often used in alternative medicine as a sedative and sleep aid.

Indirect Format

A communication method where the main point is not presented directly at the beginning but rather unfolded throughout the message, often used for sensitive or complex subjects.

Negative Feelings

Emotions that cause distress or unhappiness, such as sadness, anger, or fear.