If You Invest $2,500 in a Bank Account That Pays

question 56

Multiple Choice

If you invest $2,500 in a bank account that pays 6% interest compounded quarterly,how much will you have in five years?

• A) $2,546.96
• B) $3,367.14
• C) $8,017.84
• D) $13,267.04

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Definitions:

Net Income

The net income a company earns once all costs and taxes are subtracted from its total revenues.

Dividend

A portion of a company's earnings distributed to its shareholders, typically paid out in cash or additional shares of stock.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the company, reducing the amount of stock on the open market.

Common Stock

A form of corporate equity ownership, representing a share of the company and typically carrying voting rights.