Ajax Plc Just Decided to Save £1,500 a Month for the Next

question 118

Multiple Choice

Ajax plc just decided to save £1,500 a month for the next five years as a safety net for recessionary periods.The money will be set aside in a separate savings account which pays 3.25% interest compounded monthly.It deposits the first £1,500 today.If the company had wanted to deposit an equivalent lump sum today,how much would it have had to deposit?

• A)£82,964.59
• B)£83,189.29
• C)£83,428.87
• D)£83,687.23
• E)£84,998.01

---

Definitions:

Credit Basis

The terms and conditions under which credit is extended by a lender to a borrower, including repayment schedules and interest rates.

Operating Expense

Expenses incurred during the normal operation of a business, excluding costs related to production or direct services.

Allowance for Doubtful Accounts

A contra-asset account that estimates the amount of receivables that may not be collectible.

Accounts Receivable

Funds that are owed to a company by customers for goods or services delivered or used but not yet paid for.