If You Deposit $10,000 in a Savings Account at an Annual

question 107

Multiple Choice

If you deposit $10,000 in a savings account at an annual interest rate of 6%, how much will you have in the account at the end of three years?

• A)$8,396
• B)$11,800
• C)$11,910
• D)$10,600

---

Definitions:

Business Risk

Business risk refers to the potential for losing money or enduring financial harm due to factors like changes in consumer preference, market competition, or operational failures.

Personal Tax Rate

The percentage of an individual's income that is paid to the government as tax, which varies based on income level and jurisdiction.

WACC

Weighted Average Cost of Capital, a measure of a company's cost of capital where each category is proportionally weighted.

MM Proposition

Refers to the Modigliani-Miller theorem, which posits that under certain market conditions the value of a company is unaffected by how it is financed, whether through debt or equity.