If You Want to Have $4,200 in 29 Months,how Much

question 126

Multiple Choice

If you want to have $4,200 in 29 months,how much money must you put in a savings account today? Assume that the savings account pays 12% and it is compounded monthly (round to nearest $1) .

• A) $3,147
• B) $3,009
• C) $2,678
• D) $2,439

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Definitions:

Expense Recognition Principle

An accounting principle that directs the recognition of expenses in the same period as the related revenues.

Actual Cost

The actual expense incurred to acquire an asset or the expense incurred to produce goods or services, as opposed to budgeted or estimated costs.

Full Disclosure Principle

A financial reporting guideline requiring companies to disclose all relevant and necessary information in their financial statements and footnotes to help users make well-informed decisions.

Financial Statements

Official documentation reflecting the monetary transactions and status of a company, individual, or different entity.