You Want to Go to Europe 5 Years from Now,and

question 158

Multiple Choice

You want to go to Europe 5 years from now,and you can save $3,100 per year,beginning one year from today.You plan to deposit the funds in a mutual fund that you think will return 8.5% per year.Under these conditions,how much would you have just after you make the 5th deposit,5 years from now?

• A)$18,369
• B)$19,287
• C)$20,251
• D)$21,264
• E)$22,327

---

Definitions:

Annual Contributions

Payments or deposits made into a financial account or investment plan once every year.

Compounded Monthly

A process where the interest earned on an investment is recalculated every month, incorporating both the initial principal and the accumulated interest.

Annuity

An income-generating financial offering that provides fixed periodic payments, largely intended for the retired population.

Rate Of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s initial cost.