You Just Graduated,and You Plan to Work for 10 Years

question 26

Multiple Choice

You just graduated,and you plan to work for 10 years and then to leave for the Australian "Outback" bush country.You figure you can save $1,000 a year for the first 5 years and $2,000 a year for the next 5 years.These savings cash flows will start one year from now.In addition,your family has just given you a $5,000 graduation gift.If you put the gift now,and your future savings when they start,into an account which pays 8 percent compounded annually,what will your financial "stake" be when you leave for Australia 10 years from now?

• A) $21,432
• B) $28,393
• C) $16,651
• D) $31,148
• E) $20,000

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Definitions:

Cash Crop Vegetables

Vegetables grown primarily for sale to the market, rather than for consumption by the grower.

Legal Proceedings

The process of pursuing or defending a lawsuit, including all legal steps from the filing of a complaint through the final judgement.

Breach Of Contract

Occurs when one party to a contract fails to fulfill their part of the agreement, allowing the other party to seek legal remedies.

Bush Pilot

A pilot who flies aircraft into and out of remote or undeveloped areas, often requiring specialized skills for takeoff and landing.