Last National Bank Offers a CD Paying 7% Interest (Compounded

question 144

Multiple Choice

Last national bank offers a CD paying 7% interest (compounded annually) .If you invest $1,000 how much will you have at the end of year 5.

• A) $712.99
• B) $1,402.55
• C) $1,350.00
• D) $1,000

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Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business.

Compounded Monthly

Compounded monthly refers to the process of calculating interest on an investment or loan by adding the interest earned to the principal, so that each subsequent interest calculation is made on a larger base.

Cash on Hand

The amount of cash a company or individual has available at any given time.

Home Improvement

Home improvement involves making upgrades or repairs to a person's home, which can range from remodeling to gardening, aimed at enhancing the home's comfort, utility, or aesthetic value.