If You Put $1,000 in the Bank Today at an Interest

question 87

Multiple Choice

If you put $1,000 in the bank today at an interest rate of 6% what is its value in two years?

• A)$2,000(1.06)
• B)$1,000 + $(1.06)²
• C)$1,000(1.06)²
• D)None of the above are correct.

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Definitions:

Net Realizable Value

The estimated selling price of goods or inventory in the ordinary course of business minus any costs of completion, transportation, and selling.

Discounted Present Value

The calculation of the present value of an expected future cash flow, discounted at an appropriate rate.

GAAP Balance Sheet

A financial statement that presents the financial position of a company according to Generally Accepted Accounting Principles, listing assets, liabilities, and equity.

Corporate Valuation

The process of determining the overall value of a business entity considering its assets, earnings, market position, and potential for future earnings.