Tony Supports the Following Individuals During the Current Year: Miranda,his

question 71

Multiple Choice

Tony supports the following individuals during the current year: Miranda,his former mother-in-law who lives in her own home and has no gross income; his cousin,Jeff,age 23,who is a full-time student,earns $7,000 during the year,and lives with Tony all year long; and Matt,age 22,who is Tony's brother,is a full-time student living on campus and earns $8,000 during the year.How many dependency exemptions may Tony claim?

• A)0
• B)1
• C)2
• D)3

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Definitions:

Reinvested Interest

Reinvested interest is the compounding of interest by adding the payments back to the principal amount instead of paying it out, thereby increasing the total interest earned over time.

Simple Interest

Interest calculated only on the principal amount of a loan or investment, not on any previously earned interest.

Account Balance

The total amount of money present in an account at a given point in time, considering all credits and debits.

Funds

Capital set aside for specific purposes or investments.