Assume You Put $8,000 in a Savings Account and Leave

question 32

Multiple Choice

Assume you put $8,000 in a savings account and leave it there for four years.If you get a compounded yearly interest rate of 5% the first two years but only 4% the last two years, how much will be in the account after the four years?

• A)$9,640
• B)$9,540
• C)$9.340
• D)$9,240
• E)$9,040

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Definitions:

Investing Activities

Transactions and events that involve the acquisition or disposal of long-term assets and investments by a company.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of a company.

Direct Method

A cash flow statement preparation approach that lists major classes of gross cash receipts and payments.

Investing Activities

A section of the cash flow statement of a company which documents the buying and selling of long-term assets, including property, plant, and equipment.