Carol Would Like to Have $500,000 Saved in Her Retirement

question 94

Multiple Choice

Carol would like to have $500,000 saved in her retirement account in 30 years. Assuming an interest rate of 10%, how much should she contribute each year?

• A) $2,182.00
• B) $2,000.00
• C) $1,956.20
• D) $3,039.70

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Definitions:

Credit Sales

Sales made on credit where the payment is received after the service is delivered or the product is sold, thus creating receivables.

Credit Card Service Charge

Fees charged by credit card providers for processing transactions.

Allowance for Doubtful Accounts

An accounting method used to estimate the portion of a firm's receivables that it expects will not be collected.

Net Credit Sales

The total revenue from sales made on credit after deducting any returns or allowances, representing the true credit sales figure.