Find the Principal That Must Be Deposited in an Account

question 121

Multiple Choice

Find the principal that must be deposited in an account with an annual interest rate of 6%, compounded continuously, so that after 25 years the balance is $25,000. Round your answer to the nearest cent.

• A)$5,599.14
• B)$5,824.97
• C)$5,640.74
• D)$5,578.25
• E)$5,578.94

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Definitions:

Net Book Value

The value of an asset as recorded on the balance sheet, subtracting accumulated depreciation or amortization from its original cost.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the consumption or wear and tear of the asset.

Carrying Value

Also known as book value, it is the value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, and impairment charges.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations of these separate entities as a single economic entity.