You Want to Buy a Volvo in Seven Years

question 14

Multiple Choice

You want to buy a Volvo in seven years. The car is currently selling for $50,000, and the price will increase at a compound rate of 10% per year. You can presently invest in high-yield bonds earning a compound annual rate 14% per year. How much must you invest at the end of each of the next seven years to be able to purchase your dream car in seven years?

• A) $8,831.46
• B) $9,080.20
• C) $9,125.42
• D) $9,282.09

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Definitions:

Fire Alarm

A device that emits a loud noise or other form of alert in response to smoke, fire, or other emergencies to warn individuals of potential danger.

Source Confusion

A mistake in memory where the source of a memory is mistakenly assigned to the incorrect time, location, or individual.

Familiarity

Familiarity is the state of recognizing something or someone due to previous encounters or knowledge, which can affect perceptions and interactions.

Hypnosis

A state of heightened focus and concentration often accompanied by increased suggestibility.