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:

Total Revenue

The total amount of money generated by a company from its business activities, before any expenses are subtracted.

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales, such as materials and labor.

Corporate Tax Rate

The percentage of a corporation's profits that is paid to the government as tax.