Willy deposits $5,000 with Home State Bank on July 1,2012.Home State Bank promises to repay Willy the $5,000 plus 3 percent annual interest on July 1,2017.Home State Bank has issued Willy a

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A certificate of deposit (CD) is a savings certificate with a fixed maturity date, specified interest rate, and can be issued in any denomination. The holder of a CD is entitled to withdraw the principal plus interest when the CD, or term deposit, matures. Therefore, a CD matches the characteristics of the scenario described, making it the best choice. Options B,C, and D do not match the characteristics of the scenario provided.

Willy Deposits $5,000 with Home State Bank on July 1,2012