Justin Wishes to Invest $7000 in a 3-Year CD with an Interest

question 331

Multiple Choice

Justin wishes to invest $7000 in a 3-year CD with an interest rate of 6.2% each year and compounded daily. What is the annual percentage yield for Justin's CD (rounded to the nearest hundredth) ?

• A) 6.40%
• B) 6.20%
• C) 20.44%
• D) 1.06%
• E) 0.02%

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Definitions:

Corporate Taxes

Government levies on the earnings or profits generated by businesses.

Personal Tax Rate

The percentage of one's income that is paid to the government in taxes, which varies based on income level and jurisdiction.

Corporate Tax Rate

The tax imposed on the net income of a corporation, with rates varying by country and sometimes also by the level of income.

Leverage

Leverage refers to the use of borrowing (debt in capital structure) to amplify potential returns from an investment or project.