It Is January 1st and Darwin Davis Has Just Established

question 57

Multiple Choice

It is January 1st and Darwin Davis has just established an IRA (Individual Retirement Account) .Darwin will put $1000 into the account on December 31st of this year and at the end of each year for the following 39 years (40 years total) .How much money will Darwin have in his account at the end of the 40th year? Assume that the account pays 12% interest compounded annually and round to nearest $1000.

• A) $93,000
• B) $766,000
• C) $767,000
• D) $850,000

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Definitions:

Existing Promisor

A party in a contractual agreement who has previously committed to perform a specific duty or obligation.

Contractual Promises

Commitments made within a contract that are binding and enforceable by law, requiring parties to perform or refrain from certain actions.

Absolute Promises

Unconditional commitments made by one party to another, requiring full performance without contingencies or reliance on future events.

Implied-in-Law Condition

A legally imposed condition in a contractual agreement, not explicitly stated, created to ensure fairness and justice, often derived from the nature of the agreement or parties' intentions.