The Solution to This Problem Requires Time Value of Money

question 164

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. Denise wants to help pay for her niece's college tuition.Her niece will begin college in one year.How much would Denise need to put into a savings account today at 6% so that her niece can withdraw $10,000 per year for 4 years, and reduce the account balance to zero at the end of the 4 years?

• A) $31,680
• B) $34,650
• C) $37,600
• D) $37,720

---

Definitions:

True-breeding

Refers to organisms that, when bred, produce offspring with characteristics that are genetically identical to themselves.

Rose Bushes

Shrub plants belonging to the genus Rosa, known for their beautiful and fragrant flowers of various colors and sizes.

Polygenic Inheritance

Pattern of inheritance in which a trait is controlled by several allelic pairs.

Alleles

Variants of a gene that occur on the same gene locus but express different phenotypic traits.