The annual worth of alternative Y is closest to:

(a) $?50,000
(b) $?76,625
(c) $?90,000
(d) $?92,000


(c) $?90,000

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In order to make CDs look more attractive as an investment than they really are, some banks adver­tise that their rates are higher than their competi­tors’ rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $10,000 at 10% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? Solve by formula and write the spreadsheet function to display the i value.

What will be an ideal response?

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Fill in the blank(s) with the appropriate word(s).

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