Use of Financial Calculator TI BA II Plus Required

question 79

Multiple Choice

Use of Financial Calculator TI BA II Plus required. Angela knows that the bank rate is 4.5 percent but is willing to accept twice the risk on a long-term investment for her retirement. How much more will she earn on a 22-year deposit of $5000 if she is willing to tolerate the higher risk over the guaranteed bank rate? (round your answer)

• A)$22 012
• B)$20 125
• C)$18 625
• D)$2012

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Definitions:

Initial Outlay

The initial investment amount or the upfront cost required to start a project or investment.

Sunk Cost

A cost associated with a project expended prior to making the decision to undertake that project (for example, the cost of research into the idea). Since sunk funds are already gone, they cannot alter future costs or benefits, and should not be included in the analysis leading to a decision.

Opportunity Cost

The benefit foregone by using an asset in a particular way. Usually the income or benefit it would produce in its next best use.

Cash Outflow

Money going out of a business or individual's account, typically to pay for expenses, investments, or acquisitions.