A Small Business Owner Contributes $5,000 at the End of Each

question 4

Multiple Choice

A small business owner contributes $5,000 at the end of each quarter to a retirement account that earns an annual rate of 6% compounded quarterly. How long will it be until the account is worth $150,000? ​

• A) 24.96 quarters
• B) 43.11 quarters
• C) 57.39 quarters
• D) 69.15 quarters
• E) 13.63 quarters

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Definitions:

Periodic Inventory System

An inventory system that updates the inventory balance at specific intervals, necessitating physical counts.

Cost of Merchandise

The total purchase cost of goods that a retailer, wholesaler, or distributor has bought for the purpose of reselling.

Freight In

The cost associated with transporting goods from the supplier to the buyer, typically recorded as part of the inventory cost.

Cost of Merchandise Sold

The direct costs attributable to the goods sold by a company, including the cost of the material and labor directly used in creating the goods.