How Much Must You Deposit at the End of Each

question 45

Multiple Choice

How much must you deposit at the end of each of the next 10 years in a savings account paying 5% annually in order to have $10,000 saved by the end of the 10th year?

• A) $1,000
• B) $1,638
• C) $1,500
• D) $795

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Definitions:

Periodic Pension Expense

The total expense recognized in a period related to an organization’s pension plan.

Funded Status

The financial condition of a pension or other post-employment benefit plan, calculated as the difference between plan assets and obligations.

Defined Contribution Plan

A retirement plan in which the employer, employee, or both make contributions on a regular basis, but the final amount received by the employee depends on the plan's investment performance.