Solve the Application Problem

question 5

Multiple Choice

Solve the application problem. If no interest rate is given, assume % interest compounded daily. Round to the nearest
cent.
-A publishing company deposited $200,000 in a 2-year time deposit earning 6% compounded daily with a Chicago bank as partial collateral for a loan. Find the compound amount and the interest earned.

• A)Compound amount = $244,277.21; Interest = $21,032.67
• B)Compound amount = $421,032.67; Interest = $1,032.67
• C)Compound amount = $221,032.67; Interest = $121,032.67
• D)Compound amount = $221,032.67; Interest = $21,032.67

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Definitions:

Price Elasticity

A quantification of the demand elasticity for a good relative to its price alterations.

Price Elasticity

An indicator of the sensitivity of the demand for a product to fluctuations in its price, represented by the percentage change.

Quantity Demanded

The specific amount of a product that buyers are willing to purchase at a given price, holding all other factors constant.

Absolute Value

A mathematical function that describes the distance of a number on the number line from zero, disregarding its direction; always a non-negative value.