If $1,000 Is Invested in an Account with 9% Interest

question 1

Multiple Choice

If $1,000 is invested in an account with 9% interest compounding yearly, approximately how many years will it take for the amount to double? Please refer to the following Future Value table:

• A)Slightly more than 8 years
• B)Exactly 9 years
• C)5 years
• D)Slightly less than 7 years

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Definitions:

Equal Annual Payments

Payments made in uniform amounts each year, typically used in amortization of loans or in annuities.

Compound Interest

This is the calculation of interest on a deposit or loan that takes into account both the initial principal and the compounded interest from past periods.

Bonds Payable

Long-term liabilities representing money a company owes to holders of its bond issues, often with fixed interest payments.

Long-Term Lease Liabilities

Financial obligations resulting from leasing contracts that extend beyond one year, recorded on the balance sheet under liabilities.