If Jim Wants $25,000 in Five Years and Can Earn

question 104

Multiple Choice

If Jim wants $25,000 in five years and can earn an 8% interest rate,how much does he need to invest today? (Note-Solve as a present value problem.)

• A) $16,108
• B) $17,025
• C) $15,158
• D) $17,829

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Definitions:

Journal Entry

A record in the accounting journal that represents a transaction and includes debits and credits.

Cash Register Overages

The situation where the amount of cash in a cash register exceeds the expected amount based on sales records.

Petty Cash Fund

A small amount of cash kept on hand within a business for minor, day-to-day expenses.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.