Travis Has a Savings Account That His Parents Opened for Him

question 30

Multiple Choice

Travis has a savings account that his parents opened for him. It pays 8% annual interest. His uncle also opened an account for him, but it pays 14% annual interest. If there is $600 more in the account that pays 8%, and the total interest from both accounts is $202, how much money is in each of the accounts?

• A) $1,270 invested at 8% $670 invested at 14%
• B) $1,405 invested at 8% $805 invested at 14%
• C) $1,360 invested at 8% $760 invested at 14%
• D) $1,370 invested at 8% $770 invested at 14%
• E) $1,300 invested at 8% $700 invested at 14%

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.

Long-Term Debt

Financial obligations of a company that are due more than one year in the future.

Incremental Value

The additional value that is gained from making an investment or conducting a project, compared to doing nothing.

Net Present Value

A financial analysis method used to evaluate the profitability of an investment or project, assessing the value of all future cash flows, both incoming and outgoing.