-Jim Hall Invested $12,000 at 8% Annual Interest and Left

question 40

Multiple Choice

-Jim Hall invested $12,000 at 8% annual interest and left the money invested without withdrawing any of the interest for 15 years. At the end of the 15 years, Jim withdrew the accumulated amount of money. What amount did Jim withdraw, assuming the investment earns compounded interest?

• A) $14,400
• B) $38,066
• C) $26,400
• D) $15,783

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Definitions:

Profitable

A financial condition where income exceeds expenses resulting in a net gain.

Accounting Equation

The fundamental formula in accounting that states that assets equal liabilities plus equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing owners' claims on the business.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.