If You Want to Have $1,200 in 27 Months, How

question 12

Multiple Choice

If you want to have $1,200 in 27 months, how much money must you put in a savings account today? Assume that the savings account pays 14% and it is compounded monthly (round to the nearest $10) .

• A) $910
• B) $890
• C) $880
• D) $860

---

Definitions:

Appreciates

Refers to an increase in the value of an asset or currency against other currencies or assets.

Depreciates

A decline in the value of an asset over time due to wear and tear, obsolescence, or market conditions.

British Pound

The official currency of the United Kingdom, also known as GBP or Sterling.

Exchange-rate Systems

These are frameworks established by countries to govern how their currencies exchange with one another, including floating, fixed, and pegged exchange rates.