Use This Information to Answer the Following Question A Deposit of $2,900 Made at the End of Each

question 153

Multiple Choice

Use this information to answer the following question. $\begin{array}{|c|c|c|}\hline \text { Periods } & \text { Future Value of } \$ 1 \text { at } 12 \text { Percent } & \begin{array}{c}\text { Future Value of Ordinary Annuity of } \$ 1 \\\text { at } 12 \text { Percent }\end{array} \\\hline 1 & 1.120 & 1.000 \\\hline 2 & 1.254 & 2.120 \\\hline 3 & 1.405 & 3.374 \\\hline\end{array}$ A deposit of $2,900 made at the end of each year for three years would grow to how much?

• A) $4,074.50
• B) $9,784.60
• C) $8,700.00
• D) $9,744.00

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Definitions:

Exchange Gain

A profit resulting from holding assets in a foreign currency as the exchange rate fluctuates.

Exchange Loss

A loss resulting from holding foreign currencies that depreciate against the home currency.

Forward Contract

An agreement to purchase or sell an asset at a predetermined future date and price, often used as a hedging instrument against price fluctuations.

Recognition

The process in accounting where certain transactions are recorded in the financial statements of a reporting period.