If the Current Rate of Interest Is 8%,then the Future

question 63

Multiple Choice

If the current rate of interest is 8%,then the future value 20 years from now of an investment that pays $1000 per year and lasts 20 years is closest to:

• A)$45,762.
• B)$36,725.
• C)$9818.
• D)$93,219.

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Definitions:

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life, important in calculating depreciation.

Depreciation Expense

The distribution of a tangible asset's cost over its lifespan, treating it as an expenditure.

Double Declining-balance

A method of accelerated depreciation that doubles the straight-line depreciation rate.

Depreciation Expense

This refers to the allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up during a fiscal period.