Jessica Invested $2,000 Today in an Investment That Pays 6

Multiple Choice

Jessica invested $2,000 today in an investment that pays 6.5 percent annual interest.Which one of the following statements is correct, assuming all interest is reinvested?

A) She will earn the same amount of interest each year.
B) She could have the same future value and invest less than $2,000 initially if she could earn more than 6.5 percent interest.
C) She will earn an increasing amount of interest each and every year even if she should decide to withdraw the interest annually rather than reinvesting the interest.
D) Her interest for Year 2 will be equal to $2,000 × .065 × 2.
E) She will be earning simple interest.