Justin Invests $4,000 in a Savings Account for Two Years

question 21

Multiple Choice

Justin invests $4,000 in a savings account for two years. The account pays 2% interest compounded annually. How much money will be in the account at the end of the second year?

• A) $4,161.60
• B) $4,160.00
• C) $4,080.00
• D) $1,161.60

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Definitions:

Accumulated Depreciation

This refers to the total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its decrease in value over time.

Cash Price

The amount of money required to purchase a good or service using cash, as opposed to credit terms or financing.

Trade-In Allowance

An amount credited to the buyer by the seller for a trade-in, which is applied to the purchase price of a new item.

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use.