The Amount You Must Deposit Now in Your Savings Account

question 31

Multiple Choice

The amount you must deposit now in your savings account, paying 5% interest, in order to accumulate $10,000 for your first tuition payment when you start college in three years is

• A)$8,500.
• B)$7,830.
• C)$8,638.
• D)$8,860.

Learn how the availability of substitutes affects price elasticity.

Recognize the impact of time on the price elasticity of demand for goods.

Distinguish between goods that are necessities and luxuries in terms of their price elasticity.

Understand how the proportion of the budget spent on an item affects its price elasticity of demand.

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Definitions:

Net Advantage

The total benefits minus the total costs of an investment or decision, used to determine its overall value or utility.

MACRS Depreciation

A method of depreciation used for tax purposes in the United States, allowing businesses to recover the cost of an asset over a specified life span through annual deductions.

Incremental Cash Flow

The additional operating cash flow that an organization receives from taking on a new project.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.