Choose the One Alternative That Best Completes the Statement or Answers

question 224

Multiple Choice

Choose the one alternative that best completes the statement or answers the question.
-Cindy will require $12,000 in 5 years to return to college to get an MBA degree. How much money should she ask her parents for now so that, if she invests it at 11% compounded continuously, she will have enough for
School? (Round your answer to the nearest dollar.)

• A) $3,994
• B) $7,121
• C) $6,923
• D) $20,799

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.

Residential Rental Properties

Real estate properties that are leased or rented out to individuals to live in, as opposed to commercial properties.

Flow-Through Entities

Business entities that pass their income, deductions, and credits down to their owners for tax purposes, avoiding taxation at the corporate level.

LLC's

Stands for Limited Liability Companies, a business structure in the U.S. that offers personal liability protection to its owners but can be taxed as a partnership.