Asked by
Henry Monaco
on Dec 15, 2024
Verified
A 4-month Guaranteed Investment Certificate with a face value of $55,000 will have a maturity value of $56,100. What simple annual interest rate is it carrying?
A) 6.00%
B) 10.20%
C) 2.00%
D) 8.00%
E) 20.00%
Guaranteed Investment Certificate
A secure investment that guarantees to return the principal plus interest at a specified rate over a fixed period.
Annual Interest Rate
The percentage of principal that is paid as interest to the lender annually, not accounting for the compound interest within that year.
Maturity Value
The final amount payable at the end of a financial instrument's term, including the principal and accumulated interest.
- Perceive the theoretical basis and practical computation involving simple interest.
- Calculate the maturity value of investments using simple interest.
Verified Answer
JK
Learning Objectives
- Perceive the theoretical basis and practical computation involving simple interest.
- Calculate the maturity value of investments using simple interest.