How Much Must Be Deposited Today in an Account Earning

question 116

Multiple Choice

How much must be deposited today in an account earning 6% annually to accumulate a 20% down payment to use in purchasing a car one year from now, assuming that the car's current price is $20,000, and inflation will be 4%?

• A) $3,774.61
• B) $3,782.20
• C) $3,924.53
• D)$4,080.08

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Definitions:

Approved Standards

Refers to formal guidelines or specifications that have been validated by an authoritative body or consensus for repeated use.

Unethical Behavior

Not conforming to a set of approved standards of behavior— cheating on an exam, for example.

Ethical Principles

Fundamental guidelines that dictate behavior, ensuring actions and decisions are morally right and benefit both individuals and society as a whole.

Personal Ethics

The set of formal or informal ethical principles that an individual uses to guide their ethical decisions.