Sara invested $500 six years ago at 5 percent interest. She spends her earnings as soon as she earns any interest

Sara invested $500 six years ago at 5 percent interest. She spends her earnings as soon as she earns any interest so she only receives interest on her initial $500 investment. Which type of interest is Sara earning?    A.  free interest B.  complex interest C.  simple interest D.  interest on interest E.  compound interest

6.	Shelley won a lottery and will receive $1,000 a year for the next ten years. The value of her winnings today discounted at her discount rate is called which one of the following?    A.  single amount B.  future value C.  present value D.  simple amount E.  compounded value

7.	Terry is calculating the present value of a bonus he will receive next year. The process he is using is called:    A.  growth analysis. B.  discounting. C.  accumulating. D.  compounding. E.  reducing.

8.	Steve just computed the present value of a $10,000 bonus he will receive in the future. The interest rate he used in this process is referred to as which one of the following?    A.  current yield B.  effective rate C.  compound rate D.  simple rate E.  discount rate