When Your First Child Is Born, You Begin to Save

question 20

Multiple Choice

When your first child is born, you begin to save for college by depositing $500 per month in an account paying 12% interest per year. You increase the amount you save by 2% per year. With continuous investment and compounding, how much will you have accumulated in the account by the time your child enters college 18 years later Round your answer to the nearest cent.

• A)$434,268.49
• B) $4,342.68
• C) $4,247,097.21
• D) $5,052.23
• E) $50,082.07

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Definitions:

Reportable Segment

A distinguishable business unit or segment of an organization for which separate financial information is available and regularly reviewed by the company's management.

Intersegment Sales

Intersegment sales refer to transactions where one segment of a company sells goods or services to another segment of the same company, affecting intra-company revenues but not consolidated revenues.

Capital Expenditures

Payments made by a company to acquire or significantly improve the capacity or capabilities of long-term assets.

Interest Revenue

Income earned by an entity from lending money or making investments that bear interest.