Tyrone Wishes to Save $35,000 in 5 Years' Time

question 246

Multiple Choice

Tyrone wishes to save $35,000 in 5 years' time. In the last 2 years, he will contribute $125 per quarter in an account earning 3.6% compounded monthly. In the middle 2 years, he will contribute $75 per month with the same monthly contributions. He plans to contribute $1,000 semi-annually during the first year, in the same account. Using the financial functions on the calculator, determine the initial deposit to be made by Tyrone if he wishes to have $35,000 in his account in 5 years.

• A) $24,918.90
• B) $24,990.11
• C) $25,105.13
• D) $25,427.15
• E) $25,681.18

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Definitions:

Creditor

An individual, organization, or entity to whom money is owed by a debtor.

Lien Legislation

Laws governing the right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Benefits

Advantages or gains received by individuals or groups, often from employment or insurance policies.

Obligations

Legal or moral duties to perform or refrain from performing certain acts, often arising from contracts, laws, or ethical principles.