As a Part of Your Savings Plan at Work, You

question 19

Multiple Choice

As a part of your savings plan at work, you have been depositing $250 per quarter in a savings account earning 8% interest compounded quarterly for the last 10 years. You will retire in 15 years and want to increase your contribution each year from $1,000 to $2,000 per year, by increasing your contribution every four months from $250 to $500. Additionally, you have just inherited $10,000, which you plan to invest now to earn interest at 12% compounded annually for the next 15 years. How much money will you have in savings when you retire 15 years from now?

• A) $126,862
• B) $73,012
• C) $161,307
• D) $194,415

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Definitions:

Periodic Inventory

An inventory system where the inventory count and cost of goods sold calculations are conducted at specific intervals.

FIFO

FIFO (First-In, First-Out) is an inventory valuation method where goods first purchased or produced are the first ones sold.

Periodic

Occurring or repeating at regular intervals.

Inventory Record

Documentation that tracks the quantities and value of products a company holds for sale.