If You Invest $1,000 at the End of Every Year

question 95

Multiple Choice

If you invest $1,000 at the end of every year for five years at an interest rate of 10%, the balance of your investment in 5 years will be closest to

• A) $1,611.
• B) $3,791.
• C) $5,000.
• D) $6,105.

---

Definitions:

Social Optimum

A state in which resources are allocated in the most efficient way from the perspective of society as a whole.

Economic Efficiency

A state where all resources in an economy are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Transaction Cost

Expenses incurred when buying or selling goods or services, including fees, taxes, and other charges.

Externality Problem

A situation in which a third party is affected by the consequences of a transaction or activity between others, either positively or negatively.