Today Thomas Deposited $100,000 in a Three-Year, 12% CD That

question 16

Multiple Choice

Today Thomas deposited $100,000 in a three-year, 12% CD that compounds quarterly. What is the maturity value of the CD?

• A)$109,270.
• B)$119,410.
• C)$142,576.
• D)$309,090.FV = $100,000 x 1.42576* = $142,576 *FV of $1: n = 12; i = 3%

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Definitions:

APR Interest

Annual Percentage Rate; a measure that reflects the total interest to be paid on a loan, mortgage, credit card, or other financial product, factored as an annual rate.

Monthly

Pertains to something occurring, produced, or settled every month.

Annual Discount Rate

The rate used to discount future cash flows to the present value, reflecting the time value of money and investment risk.

Receiving Annually

Refers to receiving a particular sum or type of benefit every year.