Pedro Gonzalez Will Invest $5,000 at the End of Each

question 67

Multiple Choice

Pedro Gonzalez will invest $5,000 at the end of each year. If the interest rate is 8%, what will the value be after three years?

• A) $12,885
• B) $6,300
• C) $16,230
• D) $15,400

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Definitions:

Basic Standard Deduction

The preset amount subtracted from income that is not subject to federal income tax, differing by filing status and not requiring itemization.

Head of Household

A tax filing status for individuals who are unmarried and provide more than half of the financial support for their household.

Taxpayer

An individual or entity that is obligated to make payments to municipal, state, or national authorities, usually in the form of taxes.

Qualifying Relative

A dependent who does not meet the criteria to be a qualifying child but qualifies based on relationship, income, and support tests for tax purposes.