Use the Information for the Question(s)below

question 72

Multiple Choice

Use the information for the question(s) below.
Assume that you are 30 years old today and that you are planning on retirement at age 65.Your current salary is $45,000 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 7%.
-If the appropriate interest rate is 8%,then present value of $500 paid at the beginning of each of the next 40 years is closest to:

• A)$23.
• B)$5962.
• C)$6439.
• D)$20,000.

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Definitions:

Clean Hands

A legal doctrine stating that a party seeking equitable relief must be free from wrongdoing in the matter before the court.

Equitable Maxim

Fundamental principles or legal standards derived from equity law, guiding fair and impartial judgement in cases where common law is inadequate.

Equity

The principle of fairness and justice in the legal system, often compared to and different from strict legal rules or statutes.

Clean Hands

A legal doctrine that requires a party seeking equitable relief to have acted fairly and without fraud or deceit in relation to the matter before the court.