Computing Annuity Payment: Trevor Smith Wants to Have a Million

question 34

Multiple Choice

Computing annuity payment: Trevor Smith wants to have a million dollars at retirement, which is 15 years away. He already has $200,000 in an investment account earning 8 per cent annually. How much does he need to save each year, beginning at the end of this year to reach his target? Assume he could earn 8 per cent on any investment he makes. (Round to the nearest dollar.)

• A) $13,464
• B) $14,273
• C) $10,900
• D) $16,110

Distinguish between different types of annuities and their respective valuations.

Understand the concept of compound interest and calculate future values of investments compounded at different periods.

Solve logarithmic equations and understand the properties of logarithms.

Determine the principal amount required for future investments using compound interest formulas.

---

Definitions:

Misunderstandings

Misunderstandings occur when communication is not clearly understood, leading to confusion or incorrect interpretations between parties.

Communicating

The process of sharing information, ideas, or feelings between individuals or groups, through various means such as speech, writing, or gestures.

Diverse Workforce

A workforce that includes individuals of varying gender, race, ethnicity, age, sexuality, language, and cultural background.

Advantages

The favorable aspects or benefits that something offers, often compared to other options or competitors.