Asked by Karina Rocha on Jul 15, 2024
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Calculate the maturity value of a five-year, $400,000 Guaranteed Investment Certificate at accumulating at 6% compounded quarterly.
A) $538,742
B) $696,988
C) $880,000
D) $903,443
E) $994,001
Guaranteed Investment Certificate
A Guaranteed Investment Certificate (GIC) is a Canadian investment that offers a guaranteed rate of return over a fixed period, often with fixed interest rates.
Compounded Quarterly
Interest that is calculated and added to the principal at the end of every quarter, leading to an increase in the amount of subsequent interest.
Maturity Value
The amount payable to an investor at the end of a fixed term investment, including the principal and interest.
- Estimate the current and future financial worth of single and multiple cash flows, taking into account varying compounding intervals.
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Learning Objectives
- Estimate the current and future financial worth of single and multiple cash flows, taking into account varying compounding intervals.
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