If You Place $100 in a Bank Account That Pays

question 59

Multiple Choice

If you place $100 in a bank account that pays 6% at the end of each year,and you leave your $100 and all your interest in the bank,how much will you have in the bank at the end of 7 years with annual compounding?

• A) (106)⁷
• B) 7 ∗ (106)
• C) 100 ∗ (1.60)⁷
• D) 100 ∗ (1.06)⁷

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Definitions:

Price Discriminate

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on the willingness to pay of different market segments.

Resale

The act of selling a product or service again, often used goods, to another buyer.

Perfectly Price Discriminate

A pricing strategy where a seller charges the maximum possible price for each unit consumed that each buyer is willing to pay, thus capturing the entire consumer surplus.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.