Afton Has a Goal of "Saving $5,000 for a Vacation

question 41

Multiple Choice

Afton has a goal of "saving $5,000 for a vacation in 3 years." Afton's goal lacks

• A)measurable terms.
• B)a realistic perspective.
• C)specific actions.
• D)a tangible end.
• E)a time frame.

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Definitions:

Compound Interest

The addition of interest to the principal sum of a loan or deposit, where interest also earns interest from that moment on.

Earnings Rate

The return on an investment or the rate at which a company or asset generates income, typically expressed as a percentage.

Rate of Return

The profit or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Present Value

The contemporary valuation of a future monetary sum or cash flow series, as determined by an agreed-upon rate of return.