The Solution to This Problem Requires Time Value of Money

question 94

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. To calculate the future value of an amount that is invested at 12%, compounded quarterly, at the end of three years, the interest factor used would be

• A) 1% for 12 periods
• B) 3% for four periods
• C) 3% for 12 periods
• D) 12% for three periods

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Definitions:

Named Beneficiary

An individual, group, or entity explicitly designated to receive benefits from a policy or account.

Partnership

A lawful business structure operated by two or more people who divide management duties and share the profits.

Liability Insurance

A type of insurance that provides protection against claims resulting from injuries and damage to people or property.

Losses

Financial or material reductions resulting from business activities or other endeavors.