Sari Puts $100 into an Account with an Interest Rate

question 192

Multiple Choice

Sari puts $100 into an account with an interest rate of 10 percent. According to the rule of 70, about how much does she have at the end of 21 years?

• A)$210
• B)$300
• C)$800
• D)$1,010

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Definitions:

NPV Method

The Net Present Value method, a way to evaluate investments by calculating the present value of all cash flows associated with the investment, minus the initial investment cost.

Mutually Exclusive

Situations or options where the choice of one excludes the ability to choose any of the other options.

After-tax Cash Flows

After-tax cash flows are the net cash flows a company generates after accounting for taxes.

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life.