Taylor Has Saved $400 at the End of Every Month

question 61

Multiple Choice

Taylor has saved $400 at the end of every month for the last 4 years with the intention of paying cash for a new car. She has earned a fixed annual rate of 4% over the 4 year period; interest is compounded monthly. How much can she pay for her new car at the end of the fourth year?

• A) $20,784
• B) $55,705
• C) $17,716
• D) $22,272

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of goods and services.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.