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Low-risk investors should assume an interest rate of 6% annually. Moderate-risk investors should use 8%, high-risk investors...

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Finance

Low-risk investors should assume an interest rate of 6%annually. Moderate-risk investors should use 8%, high-riskinvestors should assume 10%, and ultra high-risk investors shoulduse 12%. For purposes of this calculation, ignore any SocialSecurity benefit received.

Assume you are 22 years old and want to be a millionaire atretirement (age 65). How much do you need to save each month toreach your goal if you are a high-risk investor?

A. $117

B. $704

C. $1,688

D. $1,803

Answer & Explanation Solved by verified expert
4.3 Ratings (636 Votes)
The Answer is A117 We can use financial calculator for calculation of monthly saving amount but first we need to covert no of years to months and annual interest rate to    See Answer
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Transcribed Image Text

Low-risk investors should assume an interest rate of 6%annually. Moderate-risk investors should use 8%, high-riskinvestors should assume 10%, and ultra high-risk investors shoulduse 12%. For purposes of this calculation, ignore any SocialSecurity benefit received.Assume you are 22 years old and want to be a millionaire atretirement (age 65). How much do you need to save each month toreach your goal if you are a high-risk investor?A. $117B. $704C. $1,688D. $1,803

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