You Want to Have $1 Million in Your Savings Account

question 8

Multiple Choice

You want to have $1 million in your savings account when you retire.You plan on investing a single lump sum today to fund this goal.You are planning on investing in an account which will pay 7.5 percent annual interest.Which of the following will reduce the amount that you must deposit today if you are to have your desired $1 million on the day you retire?
I.Invest in a different account paying a higher rate of interest.
II.Invest in a different account paying a lower rate of interest.
III.Retire later.
IV.Retire sooner.

• A)I only
• B)II only
• C)I and III only
• D)I and IV only
• E)II and III only

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Definitions:

Semiperipheral Countries

Such as South Korea, Taiwan, and Israel, consist of former colonies that are making considerable headway in their attempts to industrialize.

Gross National Product

The total value of all goods and services produced by a country's residents and businesses, regardless of where the production takes place, over a specific time period.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, a primary indicator of economic health.

Colonies of Japan

Territories that were under Japanese imperial control from the late 19th century through the mid-20th century, including Korea, Taiwan, and parts of China.