You Agree to Make 24 Deposits of $500 at the Beginning

question 98

Multiple Choice

You agree to make 24 deposits of $500 at the beginning of each month into a bank account.At the end of the 24th month,you will have $13,150 in your account.If the bank compounds interest monthly,what nominal annual interest rate will you be earning?

• A) 9.83%
• B) 8.00%
• C) 9.13%
• D) 6.87%
• E) 8.70%

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Definitions:

Predictable

Capable of being foreseen or declared in advance with a high degree of certainty.

Correlated

When two variables have a mutual relationship that affects each other's movements or values.

Cash Flow

The total amount of money being transferred into and out of a business, measuring financial health.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.