$500 Is Contributed at the Beginning of Each Period on a Semi-Annual

question 48

Multiple Choice

$500 is contributed at the beginning of each period on a semi-annual basis for 5 years. If the rate of interest is 5% compounded semi-annually, determine how much interest was earned over this time.

• A) $500.00
• B) $462.36
• C) $402.00
• D) $741.73
• E) $302.00

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Definitions:

Annual Dividend

The total amount of dividend that a company pays to its shareholders in a year.

Rate of Return

A financial metric expressing the percentage of profit or loss on an investment over a specific period, serving as a key indicator of investment efficiency.

Dividends Reduction

A decrease in the amount of dividends distributed to shareholders, often indicating a change in the company's profit distribution policy or financial health.

Rate of Return

A measure of the profit or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.