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If I Invest $1,000 in a Financial Instrument That Pays

Question 1

Multiple Choice

If I invest $1,000 in a financial instrument that pays 10% simple interest payable at the end of each year, I will


A) not receive any interest for the first year.
B) receive the same amount of interest each year.
C) receive interest only for the first year.
D) receive less interest in year ten than in year two.
E) receive interest on both the principal and first year's interest in year two.

Correct Answer:

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