Question

Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (or is clearly​ false). Explain. My financial advisor showed me that I could reach my retirement goal with deposits of ​$165 per month and an average return of 8​%. But I​ don't want to deposit that much of my​ paycheck, so​ I'm going to reach the same goal by getting an average annual return of 17​% instead.

Answer 1

Answer:

This does not make sense because you cannot choose your own annual rate of return.

Step-by-step explanation

Reason is that you can invest your funds in market at only the available rate of returns as per different assets classes which also involves different risks. But as if you have to achieve your goal and you have to save a calculated amount at a available market rate of return but if you cannot save that much amount as calculated then you cannot assume that you can increase the market rate of return because you can do so only when that rate is available in market. Just to fulfill you investing goals you cannot say that you are going to invest a very little amount but at the highest rate say 50% p.a. which is not possible as that rate does not exits.

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Really hope this helps! Thankyou!

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