The Solution to This Problem Requires Time Value of Money

question 126

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
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David,a high school math teacher,wants to set up an IRA account into which he will deposit $2,000 per year.He plans to teach for 20 more years and then retire.If the interest on his account is 7% compounded annually,how much will be in his account when he retires?

• A)$4,800
• B)$21,118
• C)$74,458
• D)$81,990

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Definitions:

Performance

The act of carrying out or accomplishing tasks, measured against preset known standards of accuracy, completeness, and speed.

Rewards

Benefits, compensation, or other forms of recognition provided to individuals or groups for their performance and achievements.

Reward Power

The ability of an individual to influence the actions of others by offering or withholding rewards.

Jay Conger

A management theorist known for his work on leadership, influence, and negotiation within organizational settings.