Bert Put $75 into an Account and One Year Later

question 77

Multiple Choice

Bert put $75 into an account and one year later had $100.What interest rate was paid on Bert's deposit?

• A)20 percent
• B)25 percent
• C)28 percent
• D)None of the above is correct.

---

Definitions:

Compounded Semiannually

A different way to describe the process of applying interest to a principal balance twice a year, allowing interest to be earned on previously accrued interest.

Monthly Compounded

A method of calculating interest where the interest amount is added to the principal at the end of each month, increasing the amount on which subsequent interest is calculated.

Compounded Monthly

Calculating interest earnings using both the initial principal and previously earned interest on a monthly basis.

Effective Annual Rate

The annual interest rate that accounts for compounding over a given period, providing a true reflection of financial costs.