Howard Is Saving for a Long Holiday

question 92

Multiple Choice

Howard is saving for a long holiday.He deposits a fixed amount every month in a bank account with an EAR of 7.5%.If this account pays interest every month then how much should he save from each monthly paycheck in order to have $10,000 in the account in two years' time?

• A)$161
• B)$166
• C)$388
• D)$4818
• E)$417

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Definitions:

Misallocation

The inefficient distribution or usage of resources in an economy, leading to outcomes where resources could have been better utilized elsewhere.

Price Supports

Government interventions to maintain the market price of a commodity at a certain level to prevent the price from falling below a predetermined minimum.

Domestic

Pertaining to or related to the home, household, or one's own country versus foreign or international counterparts.

Foreign Economies

Refers to the economies of other nations outside of one's own, considering differing political, economic, and cultural contexts in international trade and relations.