How Long Would It Take for Nico to Save an Adequate

question 122

Multiple Choice

How long would it take for Nico to save an adequate amount for retirement if he deposits $40,000 per year into an account beginning one year from today that pays 12 percent per year if he wishes to have a total of $1,000,000 at retirement?

• A) 12.2 years
• B) 15.7 years
• C) 14.5 years
• D) 16.5 years

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Definitions:

Exponentially Depreciates

Exponential depreciation is a method of calculating the decrease in value of an asset at a rate which rapidly reduces its value at the beginning and slows down over time.

Piecewise Function

A mathematical function defined by multiple sub-functions, each applicable to a certain interval of the overall function's domain.

Cusp

On a graph, where two lines of a piecewise function meet.

Comprehensive Insurance

Insurance coverage that protects against a wide range of damages or losses, including those not caused by a collision for vehicles.