Suppose You Deposit $1,000 Today in an Account That Pays

question 51

Multiple Choice

Suppose you deposit $1,000 today in an account that pays 5% interest at the end of each year. If you make no withdrawals, what is the balance in your account at the end of four years?
Round your answer to the nearest dollar.

• A)$1,200
• B)$1,216
• C)$1,020
• D)$1,050

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Definitions:

Bogey Portfolio

A benchmark portfolio used to evaluate the performance of a mutual fund or investment manager, typically reflecting a standard or targeted investment strategy.

Geometric Average

A type of mean that represents the central tendency or typical value of a set of numbers by using the product of their values.

Value Line Index

An index that represents the performance of approximately 1,700 stocks in the Value Line Arithmetic and Geometric averages.

Equally-Weighted

An equally-weighted index strategy involves assigning each asset in a portfolio or index the same relative weight, contrasting with market-cap-weighted indexes where larger companies carry more weight.