As a Part of Your Savings Plan at Work, You

question 19

Multiple Choice

As a part of your savings plan at work, you have been depositing $250 per quarter in a savings account earning 8% interest compounded quarterly for the last 10 years. You will retire in 15 years and want to increase your contribution each year from $1,000 to $2,000 per year, by increasing your contribution every four months from $250 to $500. Additionally, you have just inherited $10,000, which you plan to invest now to earn interest at 12% compounded annually for the next 15 years. How much money will you have in savings when you retire 15 years from now?

• A) $126,862
• B) $73,012
• C) $161,307
• D) $194,415

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Definitions:

Identity Shift

A process by which an individual's self-perception and presentation to others change, often due to new experiences or roles.

Open Innovation

A business management model that encourages companies to acquire external ideas and internal inventions to accelerate innovation and market adoption.

In-house R&D

Research and Development activities carried out within an organization, as opposed to outsourcing or external collaborations.

Closed Innovation

An innovation approach where all research and development processes are conducted internally within a firm, with little or no input from external sources.