You Are Currently 25 and Would Like to Retire at Age

question 128

Multiple Choice

You are currently 25 and would like to retire at age 45. You plan to save by making equal investments of $10,000 at the end of each year for the next 20 years. If you are able to earn 8% per year on your investments, how much will you have at the end of the 20 years? Please refer to the table below:
Future Value of an Annuity of $1
$$\begin{array} { | r | r | l | } \hline \text { Periods } & 8 \% & \quad\quad\quad\\\hline & & \\\hline 12 & 18.98 & \\\hline 13 & 21.5 & \\\hline 14 & 24.21 & \\\hline 15 & 27.15 & \\\hline 16 & 30.32 & \\\hline 17 & 33.75 & \\\hline 18 & 37.45 & \\\hline 19 & 41.45 & \\\hline 20 & 45.76 & \\\hline\end{array}$$

• A) $216,000
• B) $200,000
• C) $457,600
• D) $576,900

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Definitions:

Random Variable

A variable whose value is subject to variations due to chance.

Wait Time

The duration a person must wait before receiving a service or proceeding with an activity, often analyzed to improve efficiency in various operations.

Independent

Not influenced or controlled by others; in statistics, refers to variables that are not affected by other variables in the analysis.

Blood Types

Categories of blood based on the presence or absence of antibodies and inherited antigenic substances on the surface of red blood cells.