Janet Plans on Saving $3,000 a Year and Expects to Earn

question 269

Multiple Choice

Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will Janet have at the end of twenty-five years if she earns what she expects?

• A) $219,317.82
• B) $230,702.57
• C) $236,003.38
• D) $244,868.92
• E) $256,063.66

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Definitions:

Sales Returns and Allowances

Deductions from gross sales that reflect products returned by customers and discounts provided for minor defects.

Contra-asset Account

A type of account in the general ledger that reduces the value of a related account when its balance is subtracted from the balance of the related account.

Contra-revenue Account

An account that is offset against a revenue account on the income statement, typically relating to sales returns, allowances, and discounts.

Restructure Loan

The process of modifying the terms of a loan agreement, typically to provide relief to the borrower by reducing interest rates, extending payment periods, or forgiving part of the loan.