Sharon Wishes to Have $30,000 in 4 Years' Time

question 217

Multiple Choice

Sharon wishes to have $30,000 in 4 years' time. If she deposits a lump sum of $3,500 now, then what monthly deposits need to be made if interest is at 2.7% compounded annually?

• A) $495.16
• B) $505.45
• C) $515.99
• D) $520.67
• E) $565.20

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Definitions:

Redeemed Before Maturity

This term refers to the early repayment or buyback of a bond or other debt security before its scheduled maturity date.

Conversion

The act of changing something into a different form or entity, often used in contexts like currency exchange or transforming materials in production.

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its carrying amount at the time of sale or disposal.

Sinking Fund Bond

A type of bond that includes a fund set aside by the issuer to repay the bond at maturity, ensuring the bond's eventual payoff.