Your Finance Professor Suggests That You Should Have $2,500,000 in Your

Multiple Choice

Your finance professor suggests that you should have $2,500,000 in your retirement portfolio before you even THINK about retiring.Recently,your uncle sold valuable California real estate and handed you a check for $300,000.(This is the amount you have after paying taxes.He is now your favorite uncle. ) How much of the $300,000 must you set aside today if you invest a portion of the money at an annual rate of 8.0% and you wish to retire in 35 years with the amount suggested by your finance professor?

A) $169,086
B) $14,508
C) $130,914
D) At an annual rate of return of 8.0%,$300,000 is not a large enough investment to reach the goal amount of $2,500,000 in 35 years.