The Solution to This Problem Requires Time Value of Money

question 113

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. ​
How much would have to be deposited in a savings account earning 6%, so that equal annual withdrawals of $200 can be made at the end of each of 10 years? The balance at the end of the last year would be zero.

• A) $528
• B) $1,472
• C) $2,000
• D) $2,636

---

Definitions:

AVC Curve

Average Variable Cost Curve, it represents the change in variable cost associated with producing more units of a good or service.

Variable Input

An input in the production process that can be altered in the short term to adjust the level of output.

Output

Output is the total amount of goods and services produced by an economy or business over a set period, quantifying productivity and economic activity.

Short Run

A period in economics where at least one input (e.g., capital) is fixed, focusing on immediate effects rather than long-term outcomes.