How Much More Would $1,000 Earn in 5 Years in an Account

question 11

Multiple Choice

How much more would $1,000 earn in 5 years in an account compounded continuously than in an account compounded quarterly if the interest rate on both accounts is $3.7%?

• A) $86.40
• B) $51.07
• C) $36.10
• D) $1.02

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Definitions:

Imperfectly Competitive Market

A market structure in which participants have some control over the prices because not all conditions of perfect competition are met, such as monopolistic competition and oligopoly.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, where no single party can influence the market price.

Complementary Resource

A good or service that enhances the value or performance of another primary product or service.

Profit-maximizing Firm

A company that adjusts its production and sales strategies to achieve the highest possible profit, considering its costs and market demand.