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A friend puts 1,000 in an account paying 4% a year. After one year the balance is:
A1,080
B1,040
C1,004
D1,400
Answer & Solution
Correct answer: B. 1,040
1. Four per cent of 1,000 is 40.
2. Add that to the original 1,000.
3. The balance is 1,040.
_Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._
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