Question

You want to have $1 million in your savings account when you retire. You plan on investing a single lump sum today to fund this goal. You are planning on investing in an account which will pay 7.5 percent annual interest. Which of the following will reduce the amount that you must deposit today if you are to have your desired $1 million on the day you retire?I. Invest in a different account paying a higher rate of interest.II. Invest in a different account paying a lower rate of interest.III. Retire later.IV. Retire sooner. A. I onlyB. II onlyC.I and III onlyD. I and IV onlyE. II and III only

Answer 1

C. I and III only

Step-by-step explanation:

Base on the scenario been described in the question, since I want to have one million dollars in my savings account when I retire, the best thing to do is to invest in a different account that pays high interest, this would enable me to easily reach my target of having $1million in my savings account quickly, and retiring later will also enable me to have more time for my investment to grow to meet my $1milloin target. So I and III are the best option