Sally Will Not Be Making Any Investments for Five Years

question 84

Multiple Choice

Sally will not be making any investments for five years as she is paying off student loans.In five years,she will make regular monthly investments,at the beginning of every month,in the amount of $350.She will make these investments for 25 years.What is the present value of her investment account assuming she can earn an annual return of 8.5%?

• A)$229,725
• B)$345,428
• C)$519,405
• D)$313,250

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Definitions:

Equity

The residual interest in the assets of an entity after deducting its liabilities, representing ownership interest in a company.

AASB 121

Refers to the Australian Accounting Standards Board's standard on The Effects of Changes in Foreign Exchange Rates, providing guidance on how to report foreign currency transactions and report the effects of changes in exchange rates.

Monetary Item

Financial assets and liabilities that carry a fixed or determinable amount of money, such as cash, receivables, and payables.

Foreign Exchange Rates

The prices at which one currency can be exchanged for another, influencing international trade and finance.