Your Uncle Has $415,000 and Wants to Retire

question 59

Multiple Choice

Your uncle has $415,000 and wants to retire.He expects to live for another 25 years and to earn 7.5% on his invested funds.How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?

• A) $29,783.94
• B) $45,420.51
• C) $40,952.92
• D) $37,229.93
• E) $45,048.21

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Definitions:

High-low Method

A technique used in accounting and finance to estimate the variable and fixed components of a company's costs based on the highest and lowest levels of activity.

Total Fixed Costs

The sum of all expenses that remain constant regardless of the level of production or business activity.

Productive Month

A period in which there is a high level of output or work accomplishment, often measured in terms of productivity metrics in a business context.

Fixed Cost

Expenses that do not change with the volume of production or business activity, such as rent, salaries, and insurance premiums.