You Want to Quit Your Job and Return to School

question 150

Multiple Choice

You want to quit your job and return to school for an MBA degree 3 years from now,and you plan to save $7,000 per year,beginning immediately.You will make 3 deposits in an account that pays 5.2% interest.Under these assumptions,how much will you have 3 years from today?

• A)$20,993
• B)$22,098
• C)$23,261
• D)$24,424
• E)$25,645

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Definitions:

Credit

A financial arrangement where a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest.

Effective Annual Interest Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate that takes into account compounding over a given period.

Terms Of Sale

The conditions agreed upon between a buyer and a seller regarding the purchase of goods, including payment and delivery.

Credit

The ability of a borrower to obtain goods or services before payment, based on the trust that payment will be made in the future.