Suppose $100 is deposited in a bank account paying 5% compounded annually. If the interest earned is X after five years, then the interest earned will be 2X after 10 years
Indicate whether the statement is true or false
False. Because of compounding, the balance on which interest is earned grows over time. Thus the interest earned in years six to 10 will exceed the interest earned in years 1 to 5.
Economics
You might also like to view...
Economists use the term shocks to mean
A) unexpected government actions that affect the economy. B) typically unpredictable forces that have major impacts on the economy. C) sudden rises in oil prices. D) the business cycle.
Economics
Because there are low barriers to entry in a monopolistically competitive market
A) there are many firms in the industry. B) they produce a homogeneous product. C) the firms are price takers. D) there is no non-price competition.
Economics