Consider a Certificate of Deposit That Pays 10% (Annual Percentage $A = 1000 ( 1 + 0 \cdot 1 x ) ^ { 10 / x }$

question 22

Multiple Choice

Consider a certificate of deposit that pays 10% (annual percentage rate) on an initial deposit of $1000. The balance after 10 years is $A = 1000 ( 1 + 0 \cdot 1 x ) ^ { 10 / x }$ . Estimate $\lim _ { x \rightarrow 0 ^ { + } } A$ , where $x$ is the length of the compounding period (in years) . Round your answer to the nearest hundredth.

• A)2718.28
• B)367.88
• C)1000.00
• D)10,000.00
• E)1100.00

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, usually as a result of past transactions or events.

Total Stockholders' Equity

The total net value belonging to the owners of a corporation, calculated as the difference between total assets and total liabilities.

Acid Test Ratio

A measure of a company's short-term liquidity, calculating its ability to cover short-term liabilities with its most liquid assets.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or the business's operating cycle, whichever is longer.