Question 14 • CARE_24_25_TX-Mathematical Models with Applications B
RuthAnn is 28 years old and is retiring at the age of 65. When she retires, she estimates that she will need an annual income of $32,523 for 30 years. If RuthAnn contributes 11% of her annual income to a 401(k) paying 7.1% compounded annually, will she reach her goal for retirement given that her annual income is $36,278.13? If she does not make her goal then state by what amount she will need to supplement her income. Round all answers to the nearest cent.
Answer
A
RuthAnn will meet her annual goal of exactly $32,523 for retirement.
B
RuthAnn will meet her annual goal of $32,523 for retirement with an excess of $20,791.60.
C
RuthAnn will not make her annual goal of $32,523 and will need $1,039.85 to supplement her yearly income when she retires.
D
RuthAnn will not make her annual goal of $32,523 and will need $10,395.80 to supplement her yearly income when she retires.