An Investor Is Considering Depositing $20,000 in an Account Earning

question 207

Multiple Choice

An investor is considering depositing $20,000 in an account earning 5% compounded quarterly for the next three years. Afterwards, he will take this amount and contribute $200 quarterly for the next
Four years at a rate of 4% compounded semi-annually. Finally, over the next two years, he will
Withdraw $1,000 annually at a rate of 3.5% compounded monthly. Determine the future value at the
End of this time period.

• A) $33,833.94
• B) $30,833.94
• C) $27,833.94
• D) $24,833.94
• E) $21,833.94

---

Definitions:

PI

A mathematical constant representing the ratio of a circle's circumference to its diameter, approximately 3.14159.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment.

Initial Cost

The initial expenditure needed to acquire an asset or initiate a project, encompassing purchase price and any other costs necessary to get the asset ready for use.