Xiang Invests $25,000 Per Year, Starting Today, for 20 Years

question 57

Multiple Choice

Xiang invests $25,000 per year, starting today, for 20 years at an interest rate of 7%.What is the value of the investment at the end of the 20 years?

• A)$1,096,629
• B)$1,024,887
• C)$283,390
• D)$264,850

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Definitions:

Readily Available

Something that is easily obtainable or accessible whenever needed.

Payback Period

The duration of time it takes to recoup the cost of an investment.

Discounted Payback

A capital budgeting method that calculates the time required to break even from an investment based on its discounted cash flows rather than just the nominal cash flows.

Liquid Investments

Assets that can be quickly and easily converted into cash without significant loss in value, like stocks and bonds.