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Question 6 of 8 This quiz: 8 point(s) possible This question: 1 point(s) possible Submit quiz What is a savings plan? Explain the savings plan formula. What is a savings plan? Choose the correct answer below. O A. A savings plan is a formula used to calculate the total return and annual return of savings at the end of each year. O B. A savings plan is depositing a lump sum of money and letting it grow through the power of compound interest. O C. A savings plan is depositing small amounts of money on a regular basis and letting the balance grow from the payments and interest. O D. A savings plan is a type of mutual fund that helps people pay off a debt over a long period of time. Explain the savings plan formula. Choose the correct answer below. A. The savings plan formula calculates the accumulated savings plan balance as it grows because of the periodic deposits and interest. It is used as a convenient alternative to making an extensive table of savings plan calculations. B. The savings plan formula is used by banks to determine the right interest rate to give to a person who is looking to open a savings account. C. The savings plan formula calculates the simple interest rate that the issuer promises to pay. For example, a coupon rate of 8% on a bond with a face value of $1000 means that the issuer will pay an interest of 8% x $1000 = $80 each year. D. The savings plan formula is the annual percentage yield (APY) that would give the same overall growth over Y years. It is used as a convenient alternative to making an extensive table of APY calculations. Next