Use the Compound Interest Formula , Where P Is

question 52

Multiple Choice

Use the compound interest formula , where P is the original amount of the investment, i is the interest rate per compounded period, n is the total number of compounding periods, and A is the value of the investment after n periods. An investment broker deposits $1400 into an account that earns 4.4% annual interest compounded quarterly.
What is the dollar value of the investment after 7 years? Round to the nearest dollar.

• A) $ 4675
• B) $ 1902
• C) $ 1892
• D) $ 1511

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Definitions:

Inventory Method

The approach a business uses to value its inventory and determine the cost of goods sold, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).

Gross Profit Ratio

A financial metric used to assess a company’s financial health by dividing gross profit by net sales.

Lost Inventory

Inventory that is unaccounted for due to theft, damage, or error, leading to discrepancies in stock records.

Gross Profit Method

The Gross Profit Method estimates the cost of goods sold and the ending inventory value by applying the company's average gross profit percentage to its net sales.