Gordon Started Saving $25 a Month at Age 20 in an Account

question 114

Multiple Choice

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40,he will have ____ in this account.(Use time value tables or financial calculator.)

• A)$6,000
• B)$7,170
• C)$9,169
• D)$9,255
• E)$9,890

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, usually measured by the rise in GDP.

Federal Budget Deficit

A situation where the federal government's expenditures exceed its revenues within a given fiscal year.

Paradox of Thrift

If everyone tries to save more, they will all end up saving less.

Consumption

The use of goods and services by households, which is a key component in calculating a country's Gross Domestic Product (GDP).