Assuming an Interest Rate of 10%, If You Invest a Lump

question 189

Multiple Choice

Assuming an interest rate of 10%, if you invest a lump sum of $4,000 now, the balance of your investment in 7 years will be closest to

• A) $7,796.
• B) $10,376.
• C) $19,472.
• D) $28,000.

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Definitions:

Goods

Physical items that are produced and can be traded or used to satisfy wants and needs.

Weak Axiom

A less stringent version of a mathematical axiom used in economics and decision theory that deals with the consistency of consumer choices under varying circumstances.

Revealed Preference

A concept in consumer theory stating that the preferences of consumers can be revealed by their purchasing habits.

Prices

The price in money anticipated, needed, or given in exchange for a commodity.