Which One of the Following Statements Is Correct If You

question 277

Multiple Choice

Which one of the following statements is correct if you invest $100 in an account at a simple interest rate of 4% for five years?

• A) You will earn more interest than if you invested in an account which compounded the interest.
• B) For every $1 you earn in interest in the first year, you will earn ($1.04) interest in the second year.
• C) You will earn interest on interest for four of the five years.
• D) The amount of interest you earn in year five will equal the interest you earn in year one, whether or not you reinvest your earnings.
• E) The total interest you will earn over five years will be equal to $100 x (1 +.04)^5.

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Definitions:

Friend

A person with whom one has a bond of mutual affection, typically one exclusive of sexual or family relations.

Family Member

An individual who is related to another person by blood, adoption, marriage, or other recognized family bonds.

Shneidman

A prominent figure in the field of suicidology known for his extensive research and contributions to understanding suicide.

Clear Intention

A well-defined and purposeful plan or desire to accomplish a particular outcome or goal.