Multiple Compounding (PV): You Need to Have $15,000 in Five

question 65

Multiple Choice

Multiple compounding (PV) : You need to have $15,000 in five years to pay-off a home equity loan. You can invest in an account that pays 5.75 percent compounded quarterly. How much will you have to invest today to attain your target in five years? (Round to the nearest dollar.)

• A) $4,903
• B) $11,275
• C) $14,184
• D) $12,250

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Definitions:

Mathematical Forecasting

The process of making predictions about future events based on mathematical models and statistical techniques.

Factors of Production

The inputs required for the production process, including land, labor, capital, and entrepreneurship.

Tight Bureaucracy

A highly structured organizational form with strict rules, procedures, and a clear hierarchy of authority.

Stable Environment

Describes a situation or condition characterized by consistency, predictability, and minimal changes, providing a foundation for growth and development.