Asked by Karina Garcia on Jul 03, 2024
Verified
Refer to Scenario 21-3. Assume that Scott decides to consume $100,000 in the work period. How much money will he have available for consumption in his retirement period?
A) $100,000
B) $110,000
C) $150,000
D) $165,000
Retirement Period
The phase in an individual's life post their active working years, during which they are typically supported by savings, pensions, or social security.
Work Period
The duration of time during which an individual is actively engaged in their job or tasks assigned by an employer.
Interest Rate
The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan balance.
- Analyze numerical situations to determine earnings for planning expenditures and making purchasing decisions.
- Comprehend the effects of interest rate fluctuations on savings and consumer spending across various time spans.
Verified Answer
HH
Hannah HeimosJul 10, 2024
Final Answer :
D
Explanation :
Scott decides to consume $100,000 during his working period, leaving him with $150,000 to save ($250,000 - $100,000). With an interest rate of 10 percent, his savings will grow to $165,000 by his retirement period ($150,000 * 1.10).
Learning Objectives
- Analyze numerical situations to determine earnings for planning expenditures and making purchasing decisions.
- Comprehend the effects of interest rate fluctuations on savings and consumer spending across various time spans.