Alex Is Using Excel to Calculate the Compound Interest He

question 22

Multiple Choice

Alex is using Excel to calculate the compound interest he will receive on an investment. His investment accrues interest on a quarterly basis. If the yearly interest rate is 8% and stored in Cell B3, what formula should Alex use to calculate the 1st quarter interest rate?

• A) =B3/3
• B) =B3/4
• C) =B3*3
• D) =B3*4

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Definitions:

Harm

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Marginal External Cost

The cost of producing one additional unit of a good or service that is borne by people other than the producer, often not reflected in the product's market price.

Socially Optimal

A state or outcome in which resource allocation maximizes social welfare, considering all costs and benefits to society.

Market Price

The current price at which an asset or service can be bought or sold, determined by supply and demand.