Anne Wants to Accumulate $20,000 by December 31, 2019

question 20

Multiple Choice

Anne wants to accumulate $20,000 by December 31, 2019. To accumulate that sum, she will make twelve equal quarterly deposits of $1,576.98 at the end of March, June, September, and December for the next three years, beginning on March 31, 2016, into a fund that earns interest compounded quarterly. What annual rate of interest must the fund provide to yield the desired sum? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round any intermediary calculations, and round your final answer to the nearest year.)

• A) 1%
• B) 2%
• C) 4%
• D) 5%

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Definitions:

Carrying Value

The book value of assets and liabilities recorded on the financial statements, often differing from market value.

Extraordinary Item

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, requiring separate disclosure in financial statements for clarity.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ultimately revealing the net profit or loss.

Internally Generated Patent

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