Question
elly deposits $1,000 in her savings account earning 4% per year. How much interest would she earn in a year?
Question 32 options:
$4.
$40
$44
$400
Question 33 (2 points)
Treasury bills are more liquid than CDs because there is a secondary market for T-bills.
Question 33 options:
True
False
Question 32 options:
$4.
$40
$44
$400
Question 33 (2 points)
Treasury bills are more liquid than CDs because there is a secondary market for T-bills.
Question 33 options:
True
False
Answers
GPT-4o mini
To calculate the interest Elly would earn in a year from her savings account, you can use the formula for simple interest:
Interest = Principal × Rate × Time
Where:
- Principal = $1,000
- Rate = 4% (or 0.04 as a decimal)
- Time = 1 year
So the calculation would be:
Interest = $1,000 × 0.04 × 1 = $40
Therefore, Elly would earn **$40** in interest in a year.
**Answer for Question 32: $40**
---
For Question 33, the statement is **True**. Treasury bills (T-bills) are indeed more liquid than certificates of deposit (CDs) because T-bills can be bought and sold on the secondary market, making it easier for investors to access their money when needed. On the other hand, CDs usually have fixed terms and often penalize early withdrawals.
**Answer for Question 33: True**
Interest = Principal × Rate × Time
Where:
- Principal = $1,000
- Rate = 4% (or 0.04 as a decimal)
- Time = 1 year
So the calculation would be:
Interest = $1,000 × 0.04 × 1 = $40
Therefore, Elly would earn **$40** in interest in a year.
**Answer for Question 32: $40**
---
For Question 33, the statement is **True**. Treasury bills (T-bills) are indeed more liquid than certificates of deposit (CDs) because T-bills can be bought and sold on the secondary market, making it easier for investors to access their money when needed. On the other hand, CDs usually have fixed terms and often penalize early withdrawals.
**Answer for Question 33: True**