What Lump Sum Should Be Deposited in an Account That

question 178

Multiple Choice

What lump sum should be deposited in an account that will earn at an annual rate of 9%,compounded quarterly,to grow to $150,000 for retirement in 20 years? Round your answer to the nearest cent.

• A) $147,330.10
• B) $18,292.68
• C) $53,571.43
• D) $24,961.93
• E) $25,294.49

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Definitions:

Redemption Value

The amount that an investment instrument, such as a bond, is worth at its maturity or when it is redeemed.

Stated Value

Arbitrary value placed by the board of directors on each share of no-par stock to fulfill legal capital requirements.

Total Assets

The sum of all assets, both current and noncurrent, owned by a company, representing the resources it has at its disposal.

Stockholders' Equity

Represents the ownership interest of shareholders in a corporation, calculated as total assets minus total liabilities. Also known as shareholder's equity or owner's equity.