What Single Amount Deposited Now into an Account Paying $7 \frac { 2 } { 3 } \%$

question 51

Multiple Choice

What single amount deposited now into an account paying $7 \frac { 2 } { 3 } \%$ annual interest, compounded quarterly, would fund an annuity paying $\$ 3,470$ quarterly for the next 18 years?

• A) \(\$ 134,873.15\)
• B) \(\quad \$ 135,031.34\)
• C) \(\$ 134,917.86\)
• D) \(\quad \$ 134,898.15\)

---

Definitions:

Present Value

Today's equivalent value of a prospective sum or cash flows expected later, arrived at by applying a certain rate of return.

Compounded Annually

Describes the process of earning interest on both the initial principal and the accumulated interest from previous periods on an annual basis.

Selling Price

The amount of money for which a company offers to sell its products or services to customers.

Market Rate

The prevailing price or interest rate available in the marketplace for goods, services, or securities.