You Are Asked to Choose Between a 4-Year Investment That

question 125

Multiple Choice

You are asked to choose between a 4-year investment that pays 10% compound interest and a similar investment that pays 11.5% SIMPLE interest.Which investment will you choose?

• A) the 10% compound interest investment
• B) the 11.5% simple interest investment
• C) you are indifferent between the investment choices
• D) there is not enough information to answer the question

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Definitions:

General Ledger

A complete ledger detailing every fiscal activity during the lifespan of a business.

Transaction Errors

Mistakes or inaccuracies occurring in the recording, processing, or reporting of financial transactions.

Debit

Amount entered on the left side of an account.

Credit

In financial terms, credit is the ability to borrow money or access goods or services with the understanding that payment will be made in the future.