Use the Following to Answer Questions

question 11

Multiple Choice

Use the following to answer questions
Bob Lower wants to retire in 10 years. At that time he wants to have a lump sum accumulated that would allow him to withdraw $35,000 a year for the next 20 years. Assume that Bob earns an after-tax return of eight percent. Ignore the inflation in these calculations.
- Suppose an investor invests $2,000 in a Certificate of Deposit which earns eight percent compounded quarterly. What is the value of the CD in five years?

• A) $2,208
• B) $2,939
• C) $2,800
• D) $2,972
• E) None of the above

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Definitions:

Lost

A state or condition in which something is unable to be found or has gone missing.

Discarded

Thrown away or disposed of as no longer useful or required after consideration.

Abandoned Property

Property that has been discarded by the owner, who has no intention to retain title or possession.

Eminent Domain

The right of a government to expropriate private property for public use, with compensation.