If the Current Rate of Interest Is 8%,then the Future

question 63

Multiple Choice

If the current rate of interest is 8%,then the future value 20 years from now of an investment that pays $1000 per year and lasts 20 years is closest to:

• A)$45,762.
• B)$36,725.
• C)$9818.
• D)$93,219.

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Definitions:

Common Size Analysis

A financial analysis technique that expresses each line item on a financial statement as a percentage of a base figure to allow for comparison.

Financial Statement

A written record detailing the financial activities and condition of a business, including balance sheet, income statement, and cash flow statement.

Base Amount

A reference value or level in financial calculations, often serving as a benchmark for comparing financial performance or changes.

Horizontal Analysis

A technique for evaluating a series of financial statement data over a period of time, to determine the increase (decrease) that has taken place, expressed as either an amount or a percentage.