How Long Will It Take an Investment of $25,000 at 6

question 72

Multiple Choice

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50? (^{PV of $1}, ^{FV of $1}, ^{PVA of $1}, and ^{FVA of $1}) (Use appropriate factor(s) from the tables provided.)

• A) 6 years
• B) 2 years
• C) 5 years
• D) 4 years
• E) 10 years

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's profits or losses.

Voting Common Stock

Shares that give the shareholder voting rights in a corporation's decisions, typically in proportion to the number of shares held.

Preferred Stock

Ownership in a company granting superior rights to assets and profits compared to common stock, usually accompanied by steady dividend payments.

Net Income

The amount of profit left after all expenses, taxes, and costs have been subtracted from total revenue.