Choose the Word or Phrase in [ ] Which Will

question 32

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Natalie is faced with two savings choices: Making a single deposit of $5,000 or making five annual deposits of $1,000.The interest rate on both is 4%,compounded monthly.The [lump sum deposit | annual deposits] plan will result in a higher balance at the end of five years.

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Definitions:

Annual Shareholder Meetings

A yearly gathering where company executives report to shareholders on the firm's performance and strategy.

Receive Interest

Earning income on an investment, such as a bond or savings account, based on the interest rate over time.

Limited Liability

A legal structure that limits the extent of financial liability for investors to the amount invested in a company.

Incorporation

The legal process of forming a corporation, which is a type of business entity recognized as separate from its owners.