You Put $75 in the Bank One Year Ago and Forgot

question 110

Multiple Choice

You put $75 in the bank one year ago and forgot about it.The bank sends you a notice that you now have $81 in your account.What interest rate did you earn?

• A)5 percent
• B)6 percent
• C)7 percent
• D)8 percent

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Definitions:

Full Disclosure Principle

A financial reporting guideline requiring companies to disclose all relevant and necessary information in their financial statements and footnotes to help users make well-informed decisions.

Financial Statements

Official documentation reflecting the monetary transactions and status of a company, individual, or different entity.

Accounting Equation

A fundamental principle of accounting that maintains that assets are always equal to the sum of liabilities plus equity (Assets = Liabilities + Equity).

Accounting Equation

The accounting equation represents the relationship between a company's assets, liabilities, and equity, illustrating that assets are funded by borrowing (liabilities) or investing (equity).