(Ignore Income Taxes in This Problem

question 4

Multiple Choice

(Ignore income taxes in this problem.) James just received an $8,000 inheritance check from the estate of his deceased rich uncle. James wants to set aside enough money to pay for a trip in five years. If the trip is expected to cost $5,000, how much of the $8,000 must James deposit now if the rate of return is 12% per year in order to have the $5,000 in five years?

• A)$2,535
• B)$2,835
• C)$2,000
• D)$5,000

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Definitions:

General Mental Ability

The overall capacity of an individual to understand complex ideas, adapt to the environment, learn from experiences, engage in various forms of reasoning, and overcome obstacles through thought.

Predictor

A variable or factor used to forecast or estimate an outcome or future event.

Work Performance

Relates to how well an employee executes their assigned tasks and responsibilities in a professional setting.

Highly Conscientious

Describes an individual who is particularly meticulous, diligent, and exhibits a strong sense of duty and responsibility.