Howard Is Saving for a Holiday

question 32

Multiple Choice

Howard is saving for a holiday. He deposits a fixed amount every month in a bank account with an EAR of 14.7%. If this account pays interest every month then how much should he save from each monthly paycheck in order to have $14,000 in the account in four years' time?

• A) $176
• B) $308
• C) $220
• D) $352

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Definitions:

Generation X

A demographic cohort following the baby boomers and preceding the Millennials, typically defined as being born from the early-to-mid-1960s to the early 1980s.

Traditionalists

Individuals who advocate for the preservation of traditional values, customs, and practices.

Baby Boomers

The generation that experienced a significant increase in birth rates following the end of WWII, characterized by distinct economic, political, and social trends.

Generation Y

Also known as Millennials, this demographic group is characterized by their birth years from the early 1980s to the late 1990s and is noted for their familiarity with digital technology.