Zheng Sen Wishes to Accumulate $1 Million by the End

question 50

Multiple Choice

Zheng Sen wishes to accumulate $1 million by the end of 20 years by making equal annual end-of-year deposits over the next 20 years. If Zheng Sen can earn 10 percent on his investments, how much must he deposit at the end of each year?

• A) $ 14,900
• B) $ 50,000
• C) $117,453
• D) $ 17,460

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Definitions:

Amortization

The process of gradually writing off the initial cost of an asset over its useful life.

Bond Investment

An investment in debt securities issued by corporations or governments to finance their operations.

Other Comprehensive Income

Other Comprehensive Income represents revenues, expenses, gains, and losses not included in net income, and reflects changes in equity during a period except those resulting from investments by and distributions to owners.