Stephen Has $2,400 to Invest

question 153

Multiple Choice

Stephen has $2,400 to invest. Which one of the following investment options will produce the largest future value for him?

• A) 7% simple interest for 10 years
• B) 7%, compounded annually for 10 years
• C) 7%, compounded monthly for 12 years
• D) 7%, compounded annually for 12 years
• E) 7, simple interest for 12 years

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Definitions:

Liquefied Petroleum Gas

A fuel gas made of hydrocarbons like propane and butane, used in heating appliances, cooking equipment, and vehicles.

Currency Exchange

The process by which entities swap one nation’s currency for that of another.

Oil Refineries

Industrial processing plants where crude oil is transformed and refined into more useful petroleum products such as gasoline, diesel, and jet fuels.

Floating Exchange Rate

a currency valuation system that allows the value of the currency to fluctuate according to the foreign exchange market.