If an individual invests $20 in a bank deposit promising an interest of 12 percent per annum, compounded annually, he will receive $40 after 8 years.

Name: If an individual invests $20 in a bank deposit promising an interest of 12 percent per annum, compounded annually, he will receive $40 after 8 years.
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Question

Quizplus · Accepted Answer

Using the compound interest formula, we can calculate that the amount after 8 years would be $20*(1+0.12)^8 = $52.49, not $40. Therefore, the statement is false.

If an Individual Invests $20 in a Bank Deposit Promising