A Financial Institution Is Offering a 3-Year Rate Optimizer GIC

question 51

Multiple Choice

A financial institution is offering a 3-year rate optimizer GIC with annual rates of 4.6%, 5.2% and 5.8%. If $10,000 was invested in the GIC, then determine the total interest earned at the end of the 3 year period.

• A) $1,506.25
• B) $1,642.15
• C) $1,855.68
• D) $2,106.24
• E) $2,480.68

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Definitions:

Maker

The party in a transaction who creates or issues a promissory note, thereby promising to pay a certain sum to a specified person or entity.

Bearer

A person in possession of a negotiable instrument, such as a check or bond, that is payable to whomever holds it.

Drawer

In the context of banking and finance, it refers to the person who writes or issues a cheque or draft instructing the bank to pay a specified sum.

Unconditional

refers to something that is not subject to any conditions or limitations.