Your Accountant Tells You That If You Can Continue to Earn

question 208

Multiple Choice

Your accountant tells you that if you can continue to earn the current interest rate on your balance of $800 for the next two years you will have $898.88 in your account.If your accountant is correct,then what is the current interest rate?

• A)6 percent
• B)7 percent
• C)8 percent
• D)9 percent

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Definitions:

Annuity Cost

The total amount of money it takes to fund an annuity, which provides a series of payments at fixed intervals.

Roth Retirement Plan

A type of retirement savings account allowing taxed contributions to grow tax-free, with withdrawals in retirement also being tax-free.

Regular Retirement Plan

A retirement savings plan that allows individuals to save and invest for retirement, typically with tax advantages or benefits.

Tax Rate

The percentage at which income or financial transactions are taxed by the government.