5-25-2014
The U.S. yearly "median household income" was "$51,100 in 2011."**
If you save $500 per month ($6,000/yr) with a 5% annual rate of return on investments* from age 20 to 65, how much money will you have?
$6,000 is just 12 percent of a $50,000/yr income or 6% of a $100,000/yr income.
a) $125,000 +
b) $250,000 +
c) $500,000 +
d) $1.0 million +
*Note: The question states a "5% annual rate of return on investments" not "interest." This is a conservative estimate for a 45 year span on investments. No adjustments are made for inflation or for taxes. Use the compound daily, monthly or quarterly option on the calculator to determine the value.
use one of these savings calculators to find the answer:
http://www.bankrate.com/calculators/savings/compound-savings-calculator-tool.aspx
http://www.bankrate.com/calculators/savings/savings-goal-calculator-tool.aspx
"Compound Annual Growth Rate (Annualized Return)" historical calculator
http://www.moneychimp.com/features/market_cagr.htm
ANSWER: (d) $1.0 million + (when "compunded monthly" to determine value)
(c) 2013/2014 zBlox / SmartzBlox / SavingzBlox
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