Assume That,to Help Build Your Nest-Egg,you Made Two Deposits of $100,one

question 117

Multiple Choice

Assume that,to help build your nest-egg,you made two deposits of $100,one on January 1,2014,and one on July 1,2014,in a savings account that paid 10 percent compounded semiannually.On January 1,2015,the bank increased the interest rate paid on savings accounts to 12 percent,annual compounding.Then you made a third $100 deposit on April 1,2015.How much should there be in your account on January 1,2016?

• A) $353.08
• B) $349.95
• C) $355.27
• D) $362.10
• E) $338.43

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Definitions:

Excise Tax

A specific tax levied on the sale of a particular good or service, often included in the price of products like gasoline, alcohol, and tobacco.

Ability-To-Pay

A principle of taxation that suggests taxes should be levied based on the taxpayer's ability to bear the financial burden.

Regressive Tax

A tax that takes a smaller share of the income of high-income taxpayers than of low-income taxpayers.

Progressive Tax

A tax that takes a larger share of the income of high-income taxpayers than of low-income taxpayers.