Alex and Courtney Are Each Investing $1,200 Today in a Savings

question 257

Multiple Choice

Alex and Courtney are each investing $1,200 today in a savings account. Alex will earn 4% interest compounded annually. Courtney will earn 4% simple interest. After five years Alex will have ____
More than Courtney.

• A) $19.98
• B) $20.13
• C) $20.17
• D) $20.21
• E) $20.28

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Definitions:

Variable Costs

Costs that vary directly with the level of production or volume of output, in contrast to fixed costs.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including lease payments, wages, and insurance fees.

Variable Cost

A cost that grows in direct proportion to the volume of output or sales.

Fixed Costs

Regular expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.