A 4 Year Certificate of Deposit Pays an Annual Rate

question 30

Multiple Choice

A 4 year certificate of deposit pays an annual rate of 8%, compounded daily. The maximum allowable deposit is $17,000. What is the most interest a depositor can earn from the CD? Round the result to the nearest cent.

• A) $6,410.35
• B) $6,510.45
• C) $6,310.25
• D) $6,400.34
• E) $6,420.36

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Definitions:

Financing Statement

A financing statement is a document filed by a secured party to give public notice of their interest in the personal property of a debtor, used to perfect a security interest under the Uniform Commercial Code.

Repossession

The act of a creditor or lessor taking back goods or property from the debtor or lessee, usually due to failure to meet the terms of an agreement.

Default

Failure to fulfill a legal obligation, especially the failure to pay back a loan on time or to meet the terms of a contract.

Collateral

Property or assets pledged as security for a loan, which can be seized by the lender if the loan is not repaid.