You Want to Have $35,000 in Cash to Buy a Car

question 48

Multiple Choice

You want to have $35,000 in cash to buy a car 3 years from today.You expect to earn 3.6 percent, compounded annually, on your savings.How much do you need to deposit today if this is the only money you save for this purpose?

• A)$32,618.92
• B)$34,511.68
• C)$33,726.04
• D)$31,476.67
• E)$30,156.19

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Definitions:

Cost-volume-profit Chart

A cost-volume-profit chart is a visual representation that shows how changes in a company's sales volume will affect its costs and profitability, facilitating breakeven and profit-target analysis.

Total Cost Line

A graphical representation showing the total cost associated with producing various levels of output.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed costs in a company's cost structure.

Operating Income

The profit realized from a business's core operations, calculated before interest and taxes are deducted.