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At the end of each year a self-employed person deposits $1,500 in a retirement account that earns 10 percent annually.
a) How much will be in the account when the individual retires at the age of 65 if the contributions start when the person is 45 years old?
b) How much additional money will be in the account if the individual stops making the contribution but defers retirement until age 70?
c) How much additional money will be in the account if the individual continues making the contribution but defers retirement until age 70?
d) Compare the answers to (b) and (c). What is the effect of continuing the contributions? How much is the difference between the two answers?
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Jaye's Company paid $600 cash to replace a part on equipment sold under warranty. To recognize this payment, which of the following are correct?
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