You Are Interested in Accumulating $10,000 So That You Can

question 79

Multiple Choice

You are interested in accumulating $10,000 so that you can take a cruise in 3 years. If you trying to solve for the amount that you need to invest each year, earning 6% interest compounded annually, the $10,000 represents:

• A) the amount to invest.
• B) an annuity.
• C) a future value.
• D) a present value.

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Definitions:

Income Redistribution

The transfer of income from certain individuals or groups to others through mechanisms like taxes, welfare, and public services to achieve economic equality.

Poverty Rate

The percentage of the population that lives below the national poverty line, indicating the extent of poverty in a country.

Moral Obligation

A duty which one owes, and which one ought to perform, but which he is not legally bound to fulfill.

Rawlsian Justice

A theory of distributional justice that concludes that the social contract emerging from the “original position” would call for an income distribution that would maximize the well-being of the worst-off member of society.