SOLUTION: This is all retirement questions 1. In the short term, which investment carries the most risk? A. Stock in a small company B. Stock in a large company C. Governmen

Question 1127583: This is all retirement questions
1. In the short term, which investment carries the most risk?

A. Stock in a small company

B. Stock in a large company

C. Government bond
2. When saving money for retirement, which of the following should you do with your funds?

A. Collect them in a shoe box

B. Deposit them in a checking account

C. Invest them in a variety of securities
3. Suppose Ray started saving for retirement at age 33 with plans to retire at age 68. He invested an average of $1,000 a month, with an average annual return of 5% adjusted for inflation. Assuming monthly compounding, estimate Ray's savings at the start of retirement using the future value formula: FVOA = C + (1+i)^(nt)-1)/i
A. $607,547.80
B. $1,005,398.63

C. $1,136,092.43
4. Which of the following is the name of the federally managed pension system in the United States?

A. FICA

B. Individual Retirement Account

C. Social Security
5. Which investment vehicle usually has the highest rate of return?

A. Stock in a small company

B. Stock in a large company

C. Government bond
6. When setting goals for retirement, which of the following should be considered?

A. Activities during retirement

B. Age at start of retirement

D. All of the above
7. Which of the following groups of people best describes who funds the Social Security retirement benefits of today's retirees?

A. Today's workers

B. Today's retirees

C. U.S. government
8. When should people start thinking about retirement plans?

A. As soon as possible

B. By age 30

C. By age 50
9. Suppose Ray didn't start saving for retirement until age 43. With all other factors being the same ($1,000 annual deposit with an average annual return of 5% adjusted for inflation and compounded monthly until retiring at age 68), which of the following is the new estimate of his funds upon retirement?

A. $155,282.28

B. $595,509.71

C. $980,810.15
10.Which breakdown of investments for retirement savings would a financial advisor most likely suggest for someone who is 30 years old?

A. 0% high-risk; 20% medium-risk; 80% low-risk

B. 20% high-risk; 10% medium-risk; 70% low-risk

D. 45% high-risk; 35% medium-risk; 20% low-risk
If you can help please, I would greatly be pleased with it.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Please resubmit with the math questions only. We aren't financial planners.
Q2 should be obvious.
3. Problem is misstated; the formula is FVOA = C*(not plus) (1+i)^(nt)-1)/i ,
n=12, t=35 and i is r/n, where r is the rate and n the number of compoundings per year.
1+(.05/12)=1.0041666667 don't round until the end
raise that to the 420 power and subtract 1. That will be 4.73337 but keep all numbers.
divide by (.05/12) and multiply by C or 1000.
that will give $1,136,092.43
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