Asked by Steven McCoy on May 23, 2024
Verified
Which of the following is a note of the bank where a payee purchases it and collects principle plus a set amount of interest in the future?
A) Certificate of deposit
B) Cashier's check
C) Certified check
D) Traveler's check
E) Draft
Certificate Of Deposit
A savings certificate with a fixed maturity date and specified fixed interest rate, issued by banks to individuals investing money for a period.
Principle Plus Interest
The total amount owed or invested, composed of the original sum (principal) and the earnings on that sum (interest).
- Identify the differences among several kinds of negotiable instruments, including checks, notes, and drafts.
Verified Answer
AE
Annude EugeneMay 30, 2024
Final Answer :
A
Explanation :
A Certificate of Deposit (CD) is a financial product sold by banks to customers that offers a fixed interest rate over a specified period of time. Upon purchasing a CD, the buyer agrees to lend the bank money for a fixed period, after which the initial amount (principal) plus accrued interest is returned to the buyer.
Learning Objectives
- Identify the differences among several kinds of negotiable instruments, including checks, notes, and drafts.