Floyd Ferris Invested $3000 into an Account Five Years Ago

question 37

Multiple Choice

Floyd Ferris invested $3000 into an account five years ago.Today his account has grown to have a balance of $3927.50.Given that his account offered monthly compounding of interest,the APR on this account is closest to:

• A)5.00%.
• B)5.25%.
• C)5.40%.
• D)5.54%.

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Definitions:

Note Disclosure

Supplementary information provided in financial statements, offering insight into accounting policies, risks, and uncertainties.

Contingent Asset

An asset that might come into existence subject to the occurrence of some uncertain future event.

AASB 137

The Australian Accounting Standards Board standard that specifies the accounting for provisions, contingent liabilities, and contingent assets.

Deferred Liability

A deferred liability is a financial obligation that a company owes and is recorded on its balance sheet to be settled in a future period.