The Interest Factor (IF) for the Future Value of an Ordinary

question 95

Multiple Choice

The interest factor (IF) for the future value of an ordinary annuity is 4.641 at 10% for four years. If we wish to accumulate $8,000 by the end of four years, how much should the annual payments be?

• A) $2,500
• B) $2,000
• C) $1,724
• D) $37,128

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Definitions:

Supply Costs

The expenses incurred in acquiring the materials and services necessary for production or operations.

Square Feet

A unit of area measurement equal to a square that measures one foot on each side, commonly used in the United States.

Spending Variance

is the difference between the actual amount spent on materials, labor, or overhead and the budgeted amount for these items.

Fixed Cost

An expense that remains constant, irrespective of the volume of products or services manufactured or traded.