How Much Interest Will Be Earned in the Next Year

question 68

Multiple Choice

How much interest will be earned in the next year on an investment paying 12 percent compounded annually if $100 was just credited to the account for interest?

• A)$88
• B)$100
• C)$112
• D)$200 The investment will again pay $100 plus interest on the previous interest:

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Definitions:

Credit To Inventory

An accounting entry that increases the total value of inventory held by a company, reflecting additions or corrections to stock.

Credit Terms

The conditions under which credit is extended by a seller to a buyer, detailing the repayment period, cash discount, and the due date of payment.

Customer Refunds Payable

A liability account representing amounts owed to customers for returned or unsatisfactory products or services.

Merchandise

Goods or products that are purchased for resale to customers, typically found in a retail or wholesale environment.