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:

Terminated

The condition of being brought to an end or concluded, often referring to contracts, employment, or agreements.

Insolvency

The state of being unable to pay debts as they fall due or having liabilities exceed assets.

Principal

The party that an agent’s authority can bind or act on behalf of.

Agent

An individual authorized to act on behalf of another, known as the principal, in legal or business matters.