Use the Table for the Question(s)below

question 66

Multiple Choice

Use the table for the question(s) below.
Consider the following investment alternatives:
-Which alternative offers you the lowest effective rate of return?

• A)Investment A
• B)Investment B
• C)Investment C
• D)Investment D

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Definitions:

Compounded Semiannually

The process of calculating interest where the accrued interest is added to the principal sum twice a year, resulting in interest being earned on previously earned interest.

Double Value

A term indicating that an item’s or asset's value has increased to twice its original value.

Compounded Quarterly

Interest calculation method where the interest earned is calculated and added to the principal four times a year.

Monthly Compounded

Interest calculation method where interest is added to the principal sum of a loan or deposit each month, leading to interest on interest.