Jim Mayer Has Deposited $7,000 in a Guaranteed Investment Account

question 51

Multiple Choice

Jim Mayer has deposited $7,000 in a guaranteed investment account with a promised rate of 7% compounded annually. He plans to leave it there for 4 full years when he will make a down payment on a car after graduation. How much of a down payment will he be able to make?

• A) $8,960.00
• B) $1,960.00
• C) $2,175.57
• D) $9,175.57

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Definitions:

Independent Agency

An agency of the United States government that operates independently of the executive departments, responsible for oversight and administration of specific functions.

Federal Deposit Insurance Corporation

A U.S. government agency that provides deposit insurance to depositors in American commercial banks and savings institutions, up to a defined limit.

Consumer Product Safety Commission

A U.S. federal agency responsible for regulating the sale and manufacture of consumer products to ensure they do not pose any unreasonable risk of injury or death to consumers.

Legal Positivism

A theory of law that holds that laws are rules made by human beings and that there is no inherent or necessary connection between law and morality.