Delilah knows that she will ultimately face retirement.Assume that Delilah will experience two periods in her life,one in which she works and earns income and one in which she is retired and earns no income.Delilah can earn $250,000 during her working period and nothing in her retirement period.She must both save and consume in her work period with an interest rate of 10 percent on savings.Assume that Delilah decides to consume $150,000 in the work period.How much will she consume in her retirement period

Question

Quizplus · Accepted Answer

Delilah saves $100,000 during her working period ($250,000 - $150,000). With a 10% interest rate, her savings grow to $110,000 in her retirement period ($100,000 * 1.10).

Delilah Knows That She Will Ultimately Face Retirement