If a Merchant Deposits $2,000 Annually at the End of Each

question 152

Multiple Choice

If a merchant deposits $2,000 annually at the end of each tax year in an IRA account paying interest at the rate of 4%/year compounded annually, how much will she have in her account at the end of 20 years? Round your answer to two decimal places. ​

• A) $4,382.25
• B) $59,556.16
• C) $3,600.00
• D) $25,901.32

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Definitions:

Year 2

Refers to the second year of a particular time frame, project, or financial period, often used in forecasting or comparing year-over-year performance.

Acid-Test Ratio

A stringent measure of liquidity that assesses a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Year 2

This term does not have a specific definition without context but generally refers to the second year of a given timeframe, study, or financial period.

Average Collection Period

The amount of time it typically takes for a business to receive payments owed by its customers, indicating the efficiency of a company's credit and collection policies.