You Are Considering Two Savings Options

question 105

Multiple Choice

You are considering two savings options. Both options offer a 4% rate of return. The first option is to save $1,200,$1,500,and $2,000 a year over the next three years,respectively. The other option is to save one lump sum amount today. If you want to have the same balance in your savings at the end of the three years,regardless of the savings method you select,how much do you need to save today if you select the lump sum option?

• A) $4,318.67
• B) $4,491.42
• C) $4,551.78
• D) $4,607.23
• E) $4,857.92

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Definitions:

Massage Therapy

A form of therapy involving the manipulation of soft tissues of the body to relieve pain and increase relaxation.

Childbearing Women

Women in the reproductive age group who are capable of conceiving and giving birth to children.

Music Therapy

Treatment that consists of listening, rhythm, body movement, and singing to alter ordinary levels of consciousness and achieve the mind’s fullest potential, induce relaxation, or promote self-expression.