Maria Has Just Received an Inheritance of $89,218 and She

question 132

Multiple Choice

Maria has just received an inheritance of $89,218 and she is going to invest the money today at 10.5% compounded monthly. This money must provide her with $75,000 in eight years and $100,000 in twelve years. If the $89,218 isn't enough, she will add to the investment now from her other savings. If the $89,218 is more than enough she will spend the extra money. Which of the following statements is true?

• A) She must add $11,674 to the $89,218.
• B) She must add $85,782 to the $89,218.
• C) She has exactly the right amount of money now.
• D) She can spend $137,812 of the $89,218.
• E) She can spend $28,200 of the $89,218.

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Definitions:

Market Demand Curve

A graphical representation that shows the relationship between the price of a good or service and the total quantity demanded by all consumers in the market.

Willingness To Pay

The maximum amount an individual is prepared to sacrifice to procure a good or service or to avoid something undesirable.

Pollution Emissions

These are the release of pollutants into the environment, typically from industrial or other human activities.

Added Cost

An additional expense incurred due to a new decision or action, beyond the existing costs.