An Amount Is to Be Deposited in a Savings Account

question 133

Multiple Choice

An amount is to be deposited in a savings account at the end of each year in order to provide funds for a trip to Europe, at the end of the fourth year. You have been asked to determine the amount of the annual deposit. What is the interest concept that best describes this application?

• A) Present value of a single amount.
• B) Present value of an annuity.
• C) Future value of a single amount.
• D) Future value of an annuity.

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Definitions:

Profitable

Being profitable means that a company or business generates more revenue than the costs involved in its operation, resulting in a positive financial gain.

Friendly Merger

A merger agreed upon by all parties involved, where the companies willingly combine due to perceived mutual benefits.

Hostile Merger

A takeover attempt that is made against the wishes of the target company's management and board of directors.

Merger Negotiations

Discussions and strategic planning between two or more companies with the goal of combining their operations, typically to achieve synergies.