You Are Considering Investing in a Bank Account That Pays

question 50

Multiple Choice

You are considering investing in a bank account that pays a nominal annual rate of 6%,compounded monthly.If you invest $5,000 at the end of each month,how many months will it take for your account to grow to $200,000? Round fractional years up.

• A)33
• B)37
• C)41
• D)45

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Definitions:

Period

A length of time in financial reporting, often referring to a fiscal quarter or year.

Post-Closing Trial Balance

A list of all company accounts that remain after closing entries have been made, used to verify the equality of debits and credits.

Net Income

Refers to the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Owner, Capital

An account on a company's balance sheet representing the owner's invested equity or interest in the business.