You Put $100 in a Bank for a Fixed Two

question 34

Multiple Choice

You put $100 in a bank for a fixed two year term.The interest rate on the loan is 8% per annum,compounded semi-annually.Because the term is fixed,you are not allowed to withdraw interest at any point.What is the total amount of interest earned in the final half-year of the term?

• A) $4.00
• B) $4.50
• C) $4.67
• D) $4.16
• E) $4.33

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