A Company Invested $50,000 for Two Years at a Rate

question 40

Multiple Choice

A company invested $50,000 for two years at a rate of 8% compounded semi-annually.The amount of interest they earned over the period is closest to:

• A)$4,000.
• B)$8,000.
• C)$8,493.
• D)$9,120.

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Definitions:

Forward Contract

A financial contract between two parties to buy or sell an asset at a predetermined future date and price.

Future Date

A specified date in the future at which an event is scheduled to occur or a deadline is to be met.

Quantity

The amount or number of a material or immaterial entity that is accessible or demanded.

Price

The amount of money expected, required, or given in payment for something.