An Account Paying Annual Compound Interest Was Opened with $1,000

question 224

Multiple Choice

An account paying annual compound interest was opened with $1,000 ten years ago. Today, the account balance is $1,500. If the same interest rate is offered on an account paying simple interest, how much income would be earned each year over the same time period?

• A) $36.97
• B) $40.41
• C) $40.75
• D) $41.38
• E) $50.00

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Definitions:

Misdemeanor

A criminal offense that is less serious than a felony and is often punishable by fines, community service, probation, or short-term incarceration.

Prostitution

The act of engaging in sexual activities for payment.

Attempted Murder

The crime of taking a direct action towards killing another person, but where the victim does not die.

Misdemeanor

A category of criminal offenses that are less serious than felonies and typically result in less severe punishments.