You Have Deposited $7,620 in a Special Account That Has

question 2

Multiple Choice

You have deposited $7,620 in a special account that has a guaranteed rate of return of 19% per year. If you are willing to completely exhaust the account, what is the maximum amount that you could withdraw at the end of each of the next 7 years? Select the amount below that is closest to your answer. (Ignore income taxes.) Use Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

• A) $1,295
• B) $2,056
• C) $2,219
• D) $1,089

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Definitions:

Ethanol

A renewable fuel made from various plant materials, used as an additive to gasoline to reduce emissions.

U.S. Gallons

A unit of volume measurement in the United States Customary system, different from the imperial gallon, used primarily for measuring liquids.

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Agreements to buy or sell an asset at a predetermined price at a specified time in July.

Silver

A precious metal used in jewelry, currency, and industrial applications due to its conductivity and malleability.