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A Local Bank Is Offering a Zero-Coupon Certificate of Deposit

Question 15

Multiple Choice

A local bank is offering a zero-coupon certificate of deposit for $25,000. At maturity, three years from now, the investor will receive $32,000. What is the rate of return on this investment?


A) 3 percent
B) 6 percent
C) 9 percent
D) 12 percent

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