Rob Wants to Invest $15,000 for 7 Years

question 50

Multiple Choice

Rob wants to invest $15,000 for 7 years.Which one of the following rates will provide him with the largest future value?

• A)3 percent simple interest
• B)3 percent interest, compounded annually
• C)2 percent interest, compounded annually
• D)4 percent simple interest
• E)4 percent interest, compounded annually

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Definitions:

Current Assets

Short-term resources expected to be converted into cash within one year, including cash, inventory, and accounts receivable.

Current Liabilities

Obligations or debts that a company is expected to pay off within one year or within its normal operating cycle, whichever is longer.

Creditor's Decision

The process through which a creditor analyzes the financial stability and creditworthiness of potential borrowers before lending money.

Short-term Obligations

Financial liabilities or debts that are due to be paid within a year.