Which of the Following Choices Will Result in a Greater

question 60

Multiple Choice

Which of the following choices will result in a greater future value at age 65? Choice number 1 is to invest $3,000 per year from ages 20 through 26 (a total of seven investments) into an account and then leave it untouched until you are 65 (another 39 years) .Choice number 2 is to begin at age 27 and make $3,000 deposits into an investment account every year until you are 65 years old (a total of 39 investments) .Each account earns an average of 10% per year.(The investments are end-of-year payments.)

• A)Choice 1 is better than choice 2 because it has a FV of $1,304,146.89,which is greater than choice 2 FV of $1,204,343.33.
• B)Choice 2 is better than choice 1 because it has a FV of $1,304,146.89,which is greater than choice 1 FV of $1,204,343.33.
• C)Choice 2 is better than choice 1 because it has a FV of $1,204,343.33,which is greater than choice 1 FV of $1,171,042.63.
• D)Choice 1 is better than choice 2 because it has a FV of $1,288,146.89,which is greater than choice 2 FV of $1,204,343.33.

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Definitions:

Wounded Knee

The site of an 1890 massacre where the U.S. Cavalry killed over 150 Lakota Sioux, many of whom were women and children, marking a tragic end to the American Indian Wars.

Massacre

An event involving the deliberate and violent killing of a large number of people.

Medal of Honor

The highest military decoration awarded by the United States to recognize U.S. military service members who have distinguished themselves by acts of valor.

Labor Movement

A social and political movement aimed at improving rights, conditions, and wages for workers through unions and labor laws.