You Are Going to Loan Your Friend $1,000 for One

question 70

Multiple Choice

You are going to loan your friend $1,000 for one year at a 5% rate of interest. How much additional interest can you earn if you compound the rate continuously rather than annually?

• A) $.97
• B) $1.09
• C) $1.27
• D) $1.36
• E) $1.49

---

Definitions:

Sale of Goods

A transaction between a buyer and a seller in which the seller transfers ownership of goods to the buyer for a price.

Contracts for Services

Agreements between parties where one agrees to provide a service to the other in exchange for compensation.

Sale of Land

The legal process involving the transfer of property rights in land from one party to another, typically through a deed.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, facilitating the uniformity and predictability of commercial activities across different states.