You Are Going to Withdraw $1,000 at the End of Each

question 348

Multiple Choice

You are going to withdraw $1,000 at the end of each year for the next three years from an account that pays interest at a rate of 8% compounded annually. How much must there be in the account today in order for the account to reduce to a balance of zero after the last withdrawal?

• A) $793.83
• B) $2,577.10
• C) $2,602.29
• D) $2,713.75
• E) $2,775.67

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Definitions:

Story Construction Test

A projective assessment in which a respondent constructs a story based on a picture shown by the examiner.

Association Test

A psychological test used to assess implicit associations between different concepts by measuring response times to paired stimuli.

Stems

In psychology, often refers to the initial part of a test item or question that presents the problem or context to which the test-taker must respond.

Starters

In a general context, this refers to individuals or things that initiate or begin something; in a culinary context, it refers to appetizer dishes served before the main course.