Solve the Problem $\$ 18,000$ Is Put Aside in a Money Market Account with Interest

question 296

Multiple Choice

Solve the problem.
-If $\$ 18,000$ is put aside in a money market account with interest reinvested monthly at $2.3 \%$ , find the time required for the account to earn $\$ 2,000$ . Round to the nearest month. Use the model $A = P$ $\left( 1 + \frac { r } { n } \right) ^ { n t }$ where $A$ represents the future value of $P$ dollars invested at an interest rate $r$ compounded $n$ times per year for $t$ years.

• A) 96 months
• B) 5 months
• C) 55 months
• D) 97 months

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Production

The process of creating goods or services by combining labor, materials, and capital.

Technological Improvement

The advancement or enhancement of technology, leading to increased efficiency, productivity, or quality in processes or products.

Wage Rates

The amount of compensation an employee receives from an employer in exchange for performing a specific job, typically expressed on an hourly basis.