Assume That You Are 30 Years Old Today, and That

question 13

Multiple Choice

Assume that you are 30 years old today, and that you are planning on retirement at age 65. You expect your salary to be $40,000 one year from now and you also 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:

Economic Espionage

The act of illegally obtaining confidential business information, such as trade secrets or intellectual property, for economic advantage.

United States

A country located in North America, comprising 50 states, a federal district, five major self-governing territories, and various possessions.

$600 Billion

An indicative monetary figure which could refer to various financial contexts, such as the value of a particular market, a government budget, or a company's revenue.

Economic Espionage

The act of obtaining trade secrets from business competitors through illegal means for commercial advantage.