If his savings account had earned a more conservative 9% annual rate of return,Arnold's savings would be approximately ________ less by age 68.
A)$4,132
B)$62,585
C)$167,805
D)$1,871,663

Question

Quizplus · Accepted Answer

To calculate the difference, we need to use the future value formula: 
FV = PV x (1 + r)^n

Where PV is the present value (Arnold's savings at age 40), r is the annual interest rate, and n is the number of years.

Using a calculator, we can find that Arnold's savings at age 68 with a 9% annual rate of return would be: 
FV = 200,000 x (1 + 0.09)^28 
FV = 1,852,195

The difference between this and the original amount ($2,020,000) is: 
2,020,000 - 1,852,195 = 167,805

Therefore, Choice C is the correct answer as it represents the approximate amount that Arnold's savings would be less by age 68.

If His Savings Account Had Earned a More Conservative 9