Earn an annual interest rate

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Reference no: EM13725194

1. If you have $675,000 saved for retirement how many years will it last if you earn an annual interest rate of 7% and withdraw $46,000 at the beginning of each year?

A) 14

B) 48

C) You will never run out of money

D) 23

E) 52

2. Assume you won $60 million in the lottery. You were given the option of receiving twenty $3 million annual payments, with the first payment due today or taking a $37.1 million lump sum today. You want to compare the PV annuity assuming you can invest the money at a 6.5% annual rate and which option is best?

A) $34,409,764; take the lump sum

B) $35,204,131; take the lump sum

C) $34,409,764; take the annuity

D) $38,662,810; take the annuity

E) $36,474,349; take the lump sum

Reference no: EM13725194

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