A Company Is Creating a Fund Today by Depositing $65,763

question 45

Short Answer

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

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Definitions:

Doubtful Accounts

Doubtful accounts are receivables that a company believes might become uncollectible in the future, leading to their designation as a bad debt expense.

Sales Discounts

Reductions to the selling price of goods or services, offered to customers to encourage prompt payment or to incentivize bulk purchases.

Accrual Basis

An accounting method where revenue and expenses are recognized when they are earned or incurred, regardless of when cash transactions occur.

Cash Basis

Cash basis accounting is an accounting method where revenue and expenses are recorded only when cash is received or paid, respectively.