Ruby Is Expecting Her First Child Next Month and Would

question 75

Multiple Choice

Ruby is expecting her first child next month and would like to have $80000 saved for university education when the child turns 17.If Ruby can get a 6.6 percent annual return on the education savings for her child,approximately how much does she need to start saving at the end of each month once the baby is born?

• A)$2688
• B)$392
• C)$224
• D)$218

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Definitions:

Bond Issue

The process of offering bonds for sale to potential investors, typically to raise capital for a corporation or government.

Redeemed

The act of repaying or buying back something, such as repaying a loan, fulfilling a promise, or converting a financial security.

Unamortized Premium

The portion of the bond premium that has not yet been expensed to interest over the life of the bond.

Straight-Line Method

A depreciation technique which evenly spreads the cost of a fixed asset over its useful life.