John Bought an Inflation-Indexed Security for $10,000 in January 2014

question 46

Multiple Choice

John bought an inflation-indexed security for $10,000 in January 2014.The security promises an annual interest rate of 5 percent and makes payments twice a year.If the value of the inflation index in January 2014 was 106 and its value in July 2014 was 105, John will receive an interest income of______ .

• A)?$504.76
• B)?$226.40
• C)?$182.72
• D)$368.56

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Definitions:

Labor Hours

Labor hours refer to the total number of working hours spent by employees performing specific tasks or duties.

Space Occupied

The amount of physical area taken up by a business, product, or equipment in a facility.

Direct Method

A way to prepare a cash flow statement where actual cash flows from operating activities are listed directly.

Custodial Services

Services related to the cleaning and maintenance of buildings and facilities.