Use the Compound Interest Formula to Determine the Accumulated Balance

question 133

Multiple Choice

Use the compound interest formula to determine the accumulated balance after the stated period. Assume that interest iscompounded annually.
-$2000 is invested at an APR of 1.8% for 2 years.

• A)$72.00
• B)$37.50
• C)$2036.00
• D)$2072.65

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Definitions:

Variance

A statistical measure that represents the average squared deviation from the mean, used to indicate the spread of a set of data points.

Returns

The profit or loss generated on an investment over a particular period, typically expressed as a percentage of the investment's initial cost.

Annual Coupon Bond

A bond that pays interest to the holder annually until its maturity, at which point the principal is repaid.

Real Rate

The interest rate that has been adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.