(Advanced Analysis) Ricardo Deposits $1,000 into His Savings Account

question 120

Multiple Choice

(Advanced analysis) Ricardo deposits $1,000 into his savings account. What rate of interest would he have to earn on his savings for his deposit to be worth $2,000 in eight years?

• A) 8.75 percent
• B) 9.1 percent
• C) 10 percent
• D) 10.4 percent

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Definitions:

Methane Gas

A potent greenhouse gas with a simple chemical formula CH4, commonly produced by the decomposition of organic materials and digestive processes of animals.

Sulfur Emissions

The release of sulfur compounds into the atmosphere, primarily from the burning of fossil fuels, which can cause environmental damage.

Coase Theorem

The proposition that even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs are sufficiently low.

Transaction Costs

Expenses incurred when buying or selling goods and services, beyond the price of the goods themselves.