(Advanced Analysis) Alex Wants to Have $800 Saved Up at the End

question 109

Multiple Choice

(Advanced analysis) Alex wants to have $800 saved up at the end of 10 years. If he deposits $500 today, what annually compounded rate of interest would he have to earn to reach his goal?

• A) 4.8 percent
• B) 5.2 percent
• C) 5.7 percent
• D) 6.2 percent

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Definitions:

Cost of Goods Sold

The immediate expenses related to manufacturing the products a company sells, which consist of materials and labor.

Inventory

The tangible property held for sale in the normal course of business, or to be used in producing goods or services.

Lower of Cost

An accounting principle that adjusts the value of an inventory or asset to the lower of its historical cost or its market value.

Net Realizable Value

The estimated selling price of goods minus the costs of their sale or disposal.