You Made Your First $3,000 Deposit Today into a Retirement

question 34

Essay

You made your first $3,000 deposit today into a retirement account earning an average annual rate of 6%.How long will it take your deposit to reach a value of $50,000? How long will it take if instead you invest the money into an account earning 10% per year? After making your calculations,how does this information affect your decision-making regarding long-term investments?

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Definitions:

Bursa

A small fluid-filled sac that reduces friction between bones and tendons or muscles around a joint.

Sutures

Fibrous joints between the bones of the skull that fuse with age, or stitches used to close wounds.

Skull

Common name for facial bones and bones of the cranium.

Prolactin

A hormone produced by the anterior pituitary gland that stimulates milk production after childbirth.