Which of the Following Investments Has a Larger Future Value

question 62

Multiple Choice

Which of the following investments has a larger future value: Investment A,a $1,000 investment earning 5% per year for 6 years,or Investment B,a $500 investment earning 10% per year for 6 years,with a bonus of an extra $500 added at the end of the sixth year?

• A)Investment B,with a future value of $1,386.
• B)Investment A,with a future value of $1,386.
• C)Investment A,with a future value of $1,340.
• D)The investments have equal value.

Apply cumulative and straight voting concepts in corporate governance.

Understand the role of growth rates in the valuation of companies not currently paying dividends.

Evaluate the impact of EPS and NPVGO on stock valuation.

Understand the concepts of independent and dependent variables and their roles in experiments.

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Definitions:

Gross Earnings

Definition: The total amount of money earned by an individual or entity before any deductions are made.

Commission Rate

The percentage of a sale price paid to the salesperson or agent responsible for facilitating the transaction.

Base Salary

The initial rate of compensation an employee receives from an employer, excluding any extra benefits like bonuses or overtime pay.

Hourly Rate

A fixed amount of money paid for each hour of work performed.