If You Invest $10,000 in a 4-Year Certificate of Deposit

question 56

Multiple Choice

If you invest $10,000 in a 4-year certificate of deposit (CD) paying 10 percent interest compounded annually, determine how much the CD will be worth at the end of 4 years.

• A) $13,600
• B) $45,730
• C) $14,640
• D) $15,958

---

Definitions:

Bank Charter

A legal document that authorizes the establishment and operation of a bank, setting out its rights and obligations.

Savings And Loan

A financial institution that specializes in accepting savings deposits and making mortgage and other loans.

FDIC

The Federal Deposit Insurance Corporation, a United States government agency that provides deposit insurance to depositors in US banks.

Speculative

Actions based on conjecture rather than knowledge, often in the context of investment, involving risks with the hope of substantial gains.