Chapter Five Household Savings and Investment Decisions Multiple Choice 1.Getting a professional degree can be evaluated as a)a social security decision b)an investment in human capital c)an investment in a consumer durable d)a tax exempt decision Answer:(b) 2.Suppose you will face a tax rate of 20%before and after retirement.The interest rate is 8%. You are 30 years before your retirement date and invest $10,000 to a tax deferred retirement plan.If you choose to withdraw the total accumulated amount at retirement,what will you be left with after paying taxes? a)$51,445 b) $64.000 c) $80,501 d)$100.627 Answer:(c) 3.Suppose you will face a tax rate of 20%before and after retirement.The interest rate is 8%. You are 30 years before your retirement date and have $10,000 to invest.If you invest this in an ordinary savings plan instead of a tax deferred retirement plan,what amount will you have accumulated at retirement? a)$51,445 b)$64.000 c)$80,501 d)$100,627 Answer:(a) 5-15-1 Chapter Five Household Savings and Investment Decisions Multiple Choice 1. Getting a professional degree can be evaluated as ________. a) a social security decision b) an investment in human capital c) an investment in a consumer durable d) a tax exempt decision Answer: (b) 2. Suppose you will face a tax rate of 20% before and after retirement. The interest rate is 8%. You are 30 years before your retirement date and invest $10,000 to a tax deferred retirement plan. If you choose to withdraw the total accumulated amount at retirement, what will you be left with after paying taxes? a) $51,445 b) $64,000 c) $80,501 d) $100,627 Answer: (c) 3. Suppose you will face a tax rate of 20% before and after retirement. The interest rate is 8%. You are 30 years before your retirement date and have $10,000 to invest. If you invest this in an ordinary savings plan instead of a tax deferred retirement plan, what amount will you have accumulated at retirement? a) $51,445 b) $64,000 c) $80,501 d) $100,627 Answer: (a)