Silas Is About to Begin Regular Month-End Contributions of $500

question 53

Short Answer

Silas is about to begin regular month-end contributions of $500 to a bond fund. The fund's long-term rate of return is expected to be 6% compounded semi-annually. Rounded to the next higher month, how long will it take Silas to accumulate $300,000?

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Definitions:

Absorption Costing

An accounting practice that includes the total manufacturing costs, which are direct materials, direct labor, and manufacturing overhead (both variable and fixed), in the valuation of a product.

Net Operating Income

A financial metric representing a company's income after operating expenses but before interest and taxes.

Absorption Costing

A bookkeeping approach that incorporates all production expenses—direct materials, direct labor, and both variable and fixed overhead—into the product's cost.

Net Operating Income

The profit generated from normal business operations, excluding extraordinary items and expenses like taxes.