You place $100 in a bank account that pays 8%.If you remove the interest you receive each year you can turn your stock into a flow of
A) $108 per year.
B) $100 per year.
C) $80 per year.
D) $8 per year.

Question

Quizplus · Accepted Answer

The interest earned each year is 8% of the initial deposit of $100, which is $8. Therefore, if you remove the interest each year, you will have a flow of $8 per year.

You Place $100 in a Bank Account That Pays 8