If You Begin Saving $2,000 a Year at 5% (From

question 9

Multiple Choice

If you begin saving $2,000 a year at 5% (from age 22 to age 30 or 9 years) , what will these funds grow to in this time period?

• A)$2,000
• B)$11,970
• C)$18,000
• D)$22,054
• E)$30,500

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Definitions:

Par Value

A nominal value assigned to shares of stock by the issuing company, which is the minimum price at which shares can be issued, often used for legal capital purposes.

Annual Dividend

The total dividend payment a company distributes to its shareholders in a fiscal year.

Cumulative Preferred Stock

Preferred stock where dividends accumulate if not paid in a given year and must be paid out before dividends can be distributed to common stockholders.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.