If Jethro wanted to save a set amount each month in order to buy a new pick-up truck when the new models are next available, which time value concept would be used to determine the monthly payment?
A) Present value of one.
B) Future value of one.
C) Present value of an annuity due.
D) Future value of an ordinary annuity.

Question

Quizplus · Accepted Answer

Jethro wants to save a set amount each month, which indicates a regular payment over a certain period. Therefore, the concept of the future value of an ordinary annuity would be used to determine the monthly payment needed to achieve his goal of buying a new pick-up truck in the future.

If Jethro Wanted to Save a Set Amount Each Month