Multiple Choice Questions: Question 1: The amount you must deposit now in your s

Question

Multiple Choice Questions:

Question 1:

The amount you must deposit now in your savings account, paying 5% interest, in order to accumulate $5,000 for your first tuition payment when you start college in 3 years is

A) $4,250.

B) $3,915.

C) $4,319.

D) $4,430


Question 2:

Suzy Douglas has been offered the opportunity of investing $91,925 now. The investment will earn 8% per year and at the end of its life will return $250,000 to Suzy. How many years must Suzy wait to receive the $250,000?

A) 11

B) 12

C) 13

D) 10

Explanation / Answer

1 c) 5,000/1.05^3 2. c) 91,925 (1.08)^n= 250,000 n=13

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