What Would Be the Future Value of a CD of $1,000

question 143

Multiple Choice

What would be the future value of a CD of $1,000 for two years if the bank offered a 10% interest rate compounded semiannually?

• A) $1,720
• B) $1,960
• C) $1,200
• D) $1,216

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Definitions:

Grow at

Refers to the rate at which a company or an economic variable increases over a specified period.

Rate of Return

The net gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Stock Price

The current market price at which a share of stock can be bought or sold.

Discount Rate

The interest rate used to discount future cash flows to their present value, often reflecting the risk associated with the cash flows.