If You Have $20,000 in an Account Earning 8% Annually

question 99

Multiple Choice

If you have $20,000 in an account earning 8% annually, what constant amount could you withdraw each year and have nothing remaining at the end of five years?

• A) $3,525.62
• B) $5,008.76
• C) $3,408.88
• D) $2,465.78

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Definitions:

Government Expenditures

The total amount spent by the government for its various services, projects, and functions within a specified period.

Fiscal Policy

Government policies related to taxes and spending with the goal of influencing the economy's growth, inflation, and employment levels.

Deflation

A decrease in the general price level of goods and services, leading to an increase in the purchasing power of money.

Foreign Investors

Individuals or entities that invest capital in business ventures in a country other than their own, seeking to earn a return on their investment.