You have accumulated 8,000 toward the down payment on a piece of ...

[CQXA]

You have accumulated 8,000 toward the down payment on a piece of lake front property in rural Minnesota. You wish to accumulate 12,000 for the down payment in four years.
 
  If you choose not to contribute more new funds to your down payment fund, what rate of return must your fund earn to reach your objective in the specified time? Assume that your investment fund compounds annually.
  A) 10.67 per year
  B) 50.00 per year
  C) 12.50 per year
  D) There is not enough information to answer this question.

Question 2

Rent and life insurance expenses are examples of flexible expenses.
 
  Indicate whether the statement is true or false

[cclemon1]

Answer to Question 1

A
Explanation: A) r = (FV/PV)(1/n) -1 = 12,000/8,000 )(1/4 ) - 1 = 10.67 per year.

Answer to Question 2

FALSE