If You Place $50 in a Savings Account with an Interest

question 16

Multiple Choice

If you place $50 in a savings account with an interest rate of 7% compounded weekly, what will the investment be worth at the end of five years (round to the nearest dollar) ?

• A) $72
• B) $70
• C) $71
• D) $57

Comprehend how Monte Carlo simulation utilizes random numbers.

Recognize the flexibility in simulation with respect to probability distributions.

Identify the advantages and disadvantages of using simulation models.

Understand the foundational principles behind simulation.

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Definitions:

Periodic Method

An inventory accounting system where updates to inventory accounts and cost of goods sold are made periodically at the end of a reporting period.

Journal Entries

Recorded transactions in the accounting ledger that reflect the financial activities of a business.

Voucher

A document or record acting as evidence for a transaction, or as an authorization for payment.

Net Method

An accounting technique where discounts for early payment are calculated and recorded as lower sales prices at the time of sale, in anticipation that discounts will be taken.