Mary Wants to Have $150 After Four Years by Depositing

question 33

Multiple Choice

Mary wants to have $150 after four years by depositing $100 today and earning six percent interest compounded annually for the next six years.Can Mary attain her financial goal of having $150 lump sum six years later?

• A)Yes,future value is more than $150.
• B)Yes,present value is more than $150.
• C)No,present value is less than $150.
• D)No,future value is less than $150.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period.

Interest-Bearing Note

A debt instrument that pays interest to the holder at a fixed or variable rate over time until its maturity.

Journal Entry

A record in accounting that documents a business transaction in the ledger, consisting of the debits and credits that impact various accounts.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period.