Figure 13-1 -Refer to Figure 13-1. If the World Interest Rate Equals

question 53

Multiple Choice

Figure 13-1
-Refer to Figure 13-1. If the world interest rate equals 3 percent, what is the net capital outflow?

• A) -$4000
• B) -$2000
• C) $2000
• D) $4000

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Definitions:

Reinvested Interest

Reinvested interest is the compounding of interest by adding the payments back to the principal amount instead of paying it out, thereby increasing the total interest earned over time.

Simple Interest

Interest calculated only on the principal amount of a loan or investment, not on any previously earned interest.

Account Balance

The total amount of money present in an account at a given point in time, considering all credits and debits.

Funds

Capital set aside for specific purposes or investments.