Leon's Has a "Don't Pay for One Year" Event on Right

question 69

Multiple Choice

Leon's has a "Don't Pay For One Year" event on right now at the store,so you purchase an Italian,hand-stitched leather sofa.You will pay $1,267.99 for the sofa in one year.You have a savings account that pays 3% annual interest.How much must you deposit in your account today in order to have enough money to pay for the sofa in one year?

• A) $1,231.06
• B) $1,267.99
• C) $1,195.20
• D) $1,230.56
• E) $1,337.21

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Definitions:

Ending Inventory

The total value of a company’s inventory at the end of an accounting period, calculated before the new fiscal period begins.

Accounts Payable

The amount of money a company owes to its creditors or suppliers for goods and services received but not yet paid for.

Balance Sheet

A financial statement that summarises a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insight into its financial position.

Ending Inventory

The value of goods available for sale at the end of an accounting period, crucial for calculating cost of goods sold and gross profit.