Use the Compound Interest Formula for Compounding More Than Once

question 59

Multiple Choice

Use the compound interest formula for compounding more than once a year to determine the accumulated balance afterthe stated period.
-$1200 deposit at an APR of 2% with quarterly compounding for 2 years

• A)$1248.48
• B)$1212.03
• C)$1248.00
• D)$1248.85

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Definitions:

Sustainable Rate

A concept in environmental and economic policy referring to the level of growth or extraction that can be maintained long term without depleting resources or causing severe ecological damage.

Capacity

Refers to the maximum amount that something can contain or produce, often used in the context of production and manufacturing capabilities.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without needing to increase its financial leverage or equity financing, based on its current profitability, asset utilization, dividend policy, and debt/equity ratio.

Dividend Payout Ratio

A financial ratio that shows what portion of a company's earnings is distributed to shareholders in the form of dividends.