Alex Moore is 43 years old and has accumulated $78,000 in his self-directed defined contribution pension plan. Each year he contributes $1.500 to the plan, andhis employer contributes an equal amount. Alex thinks he will retire at age 60 and figures he will live to age 83. The plan allows for two types of Investments. Oneoffers a 4% risk-free real rate of return. The other offers an expected return of 10% and has a standard deviation of 34%. Alex now has 40% of his money in the riskfree investment and 60% in the risky investment. He plans to continue saving at the same rate and keep the same proportions invested in each of the investmentsHis salary will grow at the same rate as inflationHow much can Alex expect to have in his risky account at retirement?Multiple Choice$158.982$309,530$543781$224,651

Given thatCurrent age = 43Current accumulated balance of the retirement plan = $78,000Annual…

Answered: Alex Moore is 43 years old and has…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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