Theresa wants to save $10,000 so that she can surprise her husband with a vacation six years from now. She can earn 7% on her savings. How much more will she have to deposit if she waits one more year before investing versus if she deposits one lump sum today?
A) $466.44
B) $469.15
C) $470.23
D) $471.08
E) $471.54

Question

Quizplus · Accepted Answer

The correct answer is A because the difference in the amount of money Theresa will have to deposit if she waits one more year before investing versus if she deposits one lump sum today is $466.44. This is because if she waits one more year, she will lose out on one year of interest, which will amount to $466.44.

Theresa Wants to Save $10,000 So That She Can Surprise