Multiple Compounding Periods (FV): Your Brother Has Asked You to Help

question 78

Multiple Choice

Multiple compounding periods (FV) : Your brother has asked you to help him with choosing an investment. He has $5,000 to invest today for a period of two years. You identify a bank term deposit that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years?

• A) $5,434
• B) $5,441
• C) $5,107
• D) $5,216

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Definitions:

LEO

Low Earth Orbit, an orbit around Earth with an altitude between 160 kilometers and 2,000 kilometers, used for communication satellites.

MEO

Medium Earth Orbit, a type of orbit around Earth typically used for satellites that provides broader coverage than low Earth orbit.

GPS System

A global navigation satellite system that provides geolocation and time information to a GPS receiver anywhere on or near the Earth.

Australia

A country in the Southern Hemisphere, comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands, known for its unique biodiversity and vibrant culture.