Henry Rearden Is Saving for Retirement and Has Determined That

question 63

Multiple Choice

Henry Rearden is saving for retirement and has determined that to live comfortably he must save $3 million by his 65 birthday.Henry just turned 30 today,and he has decided that starting today and continuing on every birthday up to and including his 65th birthday,he will deposit the same amount into an individual retirement account (IRA) .If Henry can earn 8% on his IRA,then the amount he must set aside each year to make sure that he will have $3 million in his account on his 65th birthday is closest to:

• A) $16,035
• B) $17,410
• C) $83,335
• D) $85,715

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Definitions:

Interest Rates

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender, or the rate earned on an investment, typically expressed as an annual percentage rate.

Construction Company

A business entity focused on the building of residential, commercial, or industrial structures, infrastructure projects, and associated activities.

Conditional Probabilities

The chances of an event's occurrence, predicated on the fact that another event has happened.

Bayes' Law

A theorem using probability to update predictions or beliefs in light of new evidence.