How Much Must Be Deposited on January 1, 2010 in a Savings

question 81

Multiple Choice

How much must be deposited on January 1, 2010 in a savings account paying 6% annually in order to make annual withdrawals of $20,000 at the end of the years 2010 and 2011? The present value of one at 6% for one period is .9434.

• A)$36,668
• B)$37,740
• C)$40,000
• D)$17,800

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Definitions:

Carbon Minerals

Minerals that contain carbon as a fundamental component, essential for the formation of life and organic compounds.

Cleavage

In geology, the tendency of crystalline materials to split along definite crystalline boundaries, creating smooth surfaces.

Hardness

A measure of a mineral's resistance to scratching, which aids in identifying minerals in field and lab settings.

Ionic

Relating to or involving ions, which are atoms or molecules with a net electric charge due to the loss or gain of one or more electrons.