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:

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders.

Closing Entries

The journal entries that transfer the balances of temporary accounts to permanent accounts at the end of the accounting period.

Financial Loss

A decrease in net income resulting from expenses exceeding revenues or due to asset devaluation, not typical of the company's usual business operations.

Stockholder

A person, company, or institution that owns at least one share of a company's stock, making them a partial owner of that company.