Jeff Deposits $3,000 into an Account Which Pays 2

question 56

Multiple Choice

Jeff deposits $3,000 into an account which pays 2.5 percent interest,compounded annually.At the same time,Kurt deposits $3,000 into an account paying 5 percent interest,compounded annually.At the end of three years:

• A)Both Jeff and Kurt will have accounts of equal value.
• B)Kurt will have twice the money saved that Jeff does.
• C)Kurt will earn exactly twice the amount of interest that Jeff earns.
• D)Kurt will have a larger account value than Jeff will.
• E)Jeff will have more money saved than Kurt.

---

Definitions:

Equivalent Units

A concept in cost accounting used to assign costs to partially completed goods, measured in terms of complete units of output.

First-In, First-Out

An inventory valuation method where the costs of the earliest goods purchased are the first to be recognized in determining cost of goods sold.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for inventory and cost calculations.

Yield Measures

Refer to the various ways to calculate the return on an investment, often considering interest or dividends received.