The Solution to This Problem Requires Time Value of Money

question 117

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. If a company wishes to accumulate $500,000 in 20 years at 5% by making equal yearly deposits into an account, calculation of the deposits is an application of the

• A) future value of a single amount.
• B) future value of an annuity.
• C) present value of a single amount.
• D) present value of an annuity.

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