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:

Share Holdings

Ownership of a portion of a company through possession of its stock.

Lowest Terms

A fraction simplified to its most basic form, where the numerator and denominator are the smallest possible integers.

Ratio

A numerical ratio representing how often one number can be divided by another, showing either how many times one is included in the other or vice versa.

Partnership Interest

Ownership share or participation in a partnership that usually entitles the holder to a proportion of the partnership's profits and assets.