Determine the Quarterly Payment Necessary to Accumulate $65,000 in a Fund

question 121

Multiple Choice

Determine the quarterly payment necessary to accumulate $65,000 in a fund paying 8% per year, compounded quarterly, for 10 years. Assume end-of-period deposits and compounding at the same intervals as deposits. Round the answer to the nearest cent. ​

• A)$1,034.01 per quarter
• B) $1,038.64 per quarter
• C) $1,099.65 per quarter
• D) $1,133.47 per quarter
• E) $1,076.12 per quarter

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Definitions:

FIFO Method

An inventory valuation method that assumes goods purchased first are the first sold, standing for "First-In, First-Out."

Conversion Costs

The total expenses of direct labor together with manufacturing overheads spent in transforming raw materials into completed products.

Process Cost Accounting System

A bookkeeping mechanism for distributing costs among similar items that are produced in large scale and without interruption.

Equivalent Units of Production

A concept in cost accounting used to assign costs to partially completed goods, calculated by taking the number of units in the production process and converting them into a number of completed units.