1. The following four scenarios describe the income earning potential of a 20-year old individual.
I. For 10 years you make $250,000 per year and then you retire for the next 50 years.
II. You earn the same wage for 45 years and then you retire for 15 years.
III. You spend 10 years in school, 35 years making a salary that rises each year, and then you retire for 15 years.
IV. You earn $10,000 per year for 35 years, and then earn $100,000 per year until you die at age 80.
Assume your goal is to retire with no wealth and you want to consume about the same amount across all 60 years of your working age life. Under which of the following scenarios listed above will the individual accumulate debt during some portion of their life?
A. |
B. |
C. |
D. |
2. The following four scenarios describe the income earning potential of a 20-year old individual.
I. For 10 years you make $250,000 per year and then you retire for the next 50 years.
II. You earn the same wage for 45 years and then you retire for 15 years.
III. You spend 10 years in school, 35 years making a salary that rises each year, and then you retire for 15 years.
IV. You earn $10,000 per year for 35 years, and then earn $100,000 per year until you die at age 80.
Assume your goal is to retire with no wealth and you want to consume about the same amount across all 60 years of your working age life. Under which of the following scenarios listed above will the individual always consume an amount that is less than their income?
A. |
B. |
C. |
D. |
3. Assume your goal is to retire with no wealth and you want to consume about the same amount across all 60 years of your working age life. All else the same, you will be able to consume more each year if
A. |
B. |
C. |
D. |
4. . Assume your goal is to retire with no wealth and you want to consume about the same amount across all 60 years of your working age life. Additionally, each year you work you receive a raise equal to cost of living plus 5%. You expect to work for 45 years and spend 15 years retired. Which of the following is true?
A. |
B. |
C. |
D. |