The Solution to This Problem Requires Time Value of Money

question 91

Multiple Choice

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Ashley inherited $140,000 from an aunt.If Ashley decides not to spend her inheritance but to leave the money in her savings account until she retires in 15 years,how much money will she have assuming an annual interest rate of 8%,compounded semiannually?

• A)$ 308,000
• B)$ 509,880
• C)$ 454,020
• D)$7,851,900

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Definitions:

Horizontal

Relating to the expansion or operation across the same level or stage in the supply chain, industry, or market, often involving partnerships or mergers.

Vertical

Pertains to a market or industry structure where the production process, from raw materials to final product delivery, is integrated within a single company or closely controlled through a chain of ownership.

Wholesaler

A wholesaler is a person or company that sells goods in large quantities at lower prices to retailers, rather than selling them directly to consumers.

Retailer

A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sell their goods to another business.