A 68-year old retiree has a pension savings of $51,000, a 401k of $58,000, and an IRA account of $68,000. Before 2008, he had 2% more cash in the pension, 12% more in the IRA, and −1% in the 401k. He wants to take out 2% from each account before he turns 72, which will cost him a penalty of an extra 1% from the pension, 2% from the 401k, and 6% from the IRA. What is the relevant information for the amount that the retiree will have in his pension if he doesn't take money out now? A: The retiree had 2% more cash in the pension in 2008
B: The retiree has a pension savings of $51,000
C: The retiree has a 401k of $58,000
D: The retiree has an IRA account of $68,000

B: The retiree has a pension savings of $51,000

Step-by-step explanation:

the answer for this question is 38

answer: c, the green line

step-by-step explanation:

there is no black line, eliminate b.

simple interest implies periodic payments, but the red line shows no payments, eliminate d.

simple interest has equal payments. if paid say every day, the graph is about a straight line (actually a stairstep).

the yellow line is not straight, eliminate a.

check: the green line is straight, answer is c.

simple interest with positive interest rate gives a straight line sloping up to the right. green line:

g(t) = $100 + ($200-$100) ÷ (20 years) × (t years)

= $100 + (4%/year) × ($100)(t years)

incidentally, the yellow line curving upward represents continuously compounded interest

y = $100 × 2^(t years / (14 assuming the yellow line hits $200 at 14 years. 2^0 is 1, so y(0) = $100; 2^(14/14) is 2, so y(14) = $200.