If $1,000 Is Invested in an Account with 4% Interest

question 124

Multiple Choice

If $1,000 is invested in an account with 4% interest compounding yearly, what will the balance of the account be after 4 years? (You may ignore small differences that result from rounding.)

• A) $1,218
• B) $1,170
• C) $1,040
• D) $1,240

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Definitions:

Convertible

Refers to a security, usually a bond or a preferred stock, that can be converted into a specified number of shares of common stock.

Common Stock

A type of security that signifies ownership in a corporation, entitling the shareholder to a share of the corporation's profits and assets.

Consolidated Earnings Per Share

A calculation of the earnings per share of a parent company and its subsidiaries, providing a measure of the combined profitability on a per-share basis.

Convertible Securities

Convertible securities are financial instruments, like bonds or preferred stocks, that can be converted into a predetermined number of the issuer's equity shares.