Jim Mayer Has Deposited $7,000 in a Guaranteed Investment Account

question 51

Multiple Choice

Jim Mayer has deposited $7,000 in a guaranteed investment account with a promised rate of 7% compounded annually. He plans to leave it there for 4 full years when he will make a down payment on a car after graduation. How much of a down payment will he be able to make?

• A) $8,960.00
• B) $1,960.00
• C) $2,175.57
• D) $9,175.57

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Definitions:

Differentiated Products

Goods or services that are distinguished from others by quality, design, branding, or other features, even if they serve the same purpose.

Monopolistic Competitor

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Short Run

A period in economics during which at least one factor of production is fixed in quantity; the opposite of the long run, where all factors of production are variable.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing firms to adjust all inputs.