The Future Value of $1,000 Compounded Annually for 8 Years

question 2

Multiple Choice

The future value of $1,000 compounded annually for 8 years at 12% may be calculated with the following formula: FV = $1,000 * (1 + 12%) ⁸
If the same $1,000 was compounded quarterly,what formula would you use to calculate the FV?

• A)FV = $1,000 * (1 + 3%)⁸
• B)FV = $1,000 * (1 + 12%)³²
• C)FV = $1,000 * (1 + 3%)³²
• D)FV = $1,000 * (1 + 12%)²

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Definitions:

Price Cut

A reduction in the selling price of goods or services, often to attract more customers or boost sales.

Consumers Spend

The total amount of money expended by consumers on goods and services within a specific time period.

Total Revenue

The total receipts a firm obtains from the sale of goods or services, calculated as the quantity sold multiplied by the price.

Declines

Situations where quantities, values, or levels decrease over a period.