(Planning for Retirement MC)

A 40-year-old person who wants to retire at age 60 starts a yearly retirement contribution in the amount of $6,000. The retirement account is forecasted to average a 5% annual rate of return, yielding a total balance of $198,395.72 at retirement age.

If this person had started with the same yearly contribution at age 30, what would the difference be in the account balances?

A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used.

$200,732.63
$200,237.36
$398,633.09
$389,633.90

Question

(Planning for Retirement MC)

A 40-year-old person who wants to retire at age 60 starts a yearly retirement contribution in the amount of $6,000. The retirement account is forecasted to average a 5% annual rate of return, yielding a total balance of $198,395.72 at retirement age.

If this person had started with the same yearly contribution at age 30, what would the difference be in the account balances?

A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used.

$200,732.63
 $200,237.36
 $398,633.09
 $389,633.90

urlocalgay · Answer

I believe your answer based on all of these would be, B: $200,237.36