Herb has $20,000 in an interest-bearing time deposit with the Applebottom Bank and Trust Company. While earning a relatively attractive rate of interest, Herb had to agree to not withdraw any of the funds until the end of a three-year period. Herb's investment represents a(n):

Question

Quizplus · Accepted Answer

The description of Herb's investment matches that of a certificate of deposit (CD), which typically involves agreeing to leave the funds on deposit for a fixed period of time in exchange for a higher interest rate.

Herb Has $20,000 in an Interest-Bearing Time Deposit with the Applebottom