Given a 4 Percent Interest Rate, Compute the Year 6

question 42

Multiple Choice

Given a 4 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,000, $1,200, $1,200, and $1,400.

• A) $4,334.53
• B) $5,070.78
• C) $5,191.68
• D) $5,484.56

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Definitions:

Loan

A borrowed amount of money that is to be repaid along with interest.

Investment

The distribution of funds or other resources with the aim of earning revenue or profit.

Total Return

The overall financial gain or loss on an investment, considering both capital gains and income such as interest or dividends.

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a regular basis.