You Have $100 to Deposit

question 21

Multiple Choice

You have $100 to deposit. Bank A offers 16% interest, compounded annually, Bank B offers 15% interest, compounded monthly. How many years would you have to keep your money in the bank for Bank B to be a better choice?

• A)Bank B is always better.
• B)4 years
• C)5 years
• D)6 years
• E)Bank B is never better.

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Definitions:

Goods On Consignment

Merchandise that is sent to a retailer by the vendor to be sold but remains the property of the vendor until sold.

Damaged Goods

Items that are broken, defective, or impaired in some way, which typically reduce their value or usefulness.

Period-End Inventory

The total value of all inventory still available for sale by a company at the end of an accounting period.

Gross Profit

Gross profit is the difference between the sales revenue and the cost of goods sold, illustrating how much a company earns from selling its products before other expenses are deducted.