First City Bank Computes Interest Semiannually

question 110

Multiple Choice

First City Bank computes interest semiannually. If the interest rate is currently 6 percent pa, the amount deposited today should be multiplied by which future value factor to calculate the amount that will accumulate by the end of 10 years?

• A) 20 periods at 12 percent
• B) 20 periods at 3 percent
• C) 10 periods at 6 percent
• D) 10 periods at 3 percent

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Definitions:

Duress

Coercion or pressure unlawfully applied to force someone to act in a manner they otherwise would not.

Additional $500

An extra amount of five hundred dollars added to a transaction or financial agreement.

Real Basis

The fundamental or underlying reason or foundation for something.

Reasonable Price

A price that is fair and appropriate for the value of the goods or services offered, often considered in legal and contractual contexts.