Find the Indicated Sum

question 290

Multiple Choice

Find the indicated sum. Use the formula for the sum of the first n terms of a geometric sequence.
-A small business owner made $50,000 the first year he owned his store and made an additional 2% over the previous year in each subsequent year. Find how much he made during his fourth year of business. Find his total earnings during the first four years. (Round to the nearest cent, if necessary.)

• A) $53,060.40; $206,080.40
• B) $0.40; $51,020.40
• C) $86,400.00; $268,400.00
• D) $103,680.00; $372,080.00

---

Definitions:

Intrinsic Value

The actual, fundamental value of an asset, based on underlying perceptions of its true value including aspects of both tangible and intangible factors.

Market Efficiency

The hypothesis that financial markets are "efficient" in reflecting information in the price of securities, making it impossible to consistently achieve higher returns without assuming higher risk.

Discount Rates

The interest rate used to determine the present value of future cash flows in discounted cash flow analysis, which helps to assess the attractiveness of an investment.

Fundamental Analysis

A method of evaluating a security that involves examining related economic, financial, and other qualitative and quantitative factors.