A Young Executive Deposits $200 at the End of Each

question 82

Multiple Choice

A young executive deposits $200 at the end of each month for 5 years and then increases the deposits. If the account earns an annual rate of 8.1%, compounded monthly, how much (to the nearest dollar) should each new deposit be in order to have a total of $300,000 after 17 years from the time the deposits were increased? Round your answer to the nearest cent. ​

• A) $367.97
• B) $1,952.64
• C) $1,286.64
• D) $900.55
• E) $653.90

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Definitions:

Liquidity

The ease with which an asset can be converted into cash without significantly affecting its price, reflecting a company's ability to meet short-term obligations.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the business's normal operating cycle.

Retained Earnings

The part of the net earnings not paid out as dividends to shareholders but instead retained by the business for reinvestment purposes or debt repayment.

Cumulative Earnings

The total amount of net income a company has earned over its existence, after dividends and other distributions are subtracted.