Find the Simple Interest on a $3,000 Investment Made for 10

question 63

Multiple Choice

Find the simple interest on a $3,000 investment made for 10 years at an interest rate of 5% per year. What is the future value ?

• A)The simple interest is $1,520, the future value is $4,520.
• B) The simple interest is $1,520, the future value is $4,480.
• C) The simple interest is $1,500, the future value is $4,500.
• D) The simple interest is $1,530, the future value is $4,530.
• E) The simple interest is $1,490, the future value is $4,520.

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Definitions:

M&M Proposition I

A theory in corporate finance stating that in a perfect market, the value of a firm is unaffected by how it is financed, whether through debt or equity.

Equity Risk

The risk of loss associated with fluctuations in the equity market.

Capital Structure Policy

Refers to the decisions a company makes regarding the mix of long-term debt and equity financing in its capital structure.