Jane Wants to Set Aside Funds to Take an Around

question 13

Multiple Choice

Jane wants to set aside funds to take an around the world cruise in four years. Assuming that Jane has €8,000 to invest today in an account expected to earn 6% per annum, how much will she have to spend on her vacation?

• A) €6,336
• B) €10,100
• C) €34,997
• D) €10,705

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Definitions:

Installments

Payments divided over a period of time for a debt or purchase, rather than paying the total amount upfront.

Default

Failing to fulfill a legal obligation, such as not making a scheduled payment on a loan.

Negotiable Instrument

An official paper that promises the disbursement of a designated sum of money, which can be demanded at any time or paid at an agreed-upon moment, identifying the payer.

Given Value

The consideration or price paid for something; often used in the context of transactions or agreements to denote the value exchanged.