This Afternoon, You Deposited $1,000 into a Retirement Savings Account

question 30

Multiple Choice

This afternoon, you deposited $1,000 into a retirement savings account. The account will compound interest at 6 percent annually. You will not withdraw any principal or interest until you retire in forty years. Which one of the following statements is correct?

• A)The interest you earn six years from now will equal the interest you earn ten years from now.
• B)The interest amount you earn will double in value every year.
• C)The total amount of interest you will earn will equal $1,000 *.06 * 40.
• D)The present value of this investment is equal to $1,000.
• E)The future value of this amount is equal to $1,000* (1 + 40)^.06.

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Definitions:

Frequency of Service

The regularity or rate at which a public or private service is offered or performed, often measured within a certain time frame.

Commuter Rail

A passenger rail transport service that primarily operates within urban areas, connecting workers to their places of employment.

Positive Correlation

A relationship between two variables where they move in the same direction, meaning when one variable increases, the other also increases, and vice versa.

Slope

In mathematics, the measure of the steepness or incline of a line, often calculated as the ratio between the change in the y-value to the change in the x-value.