What Annual Interest Rate Would You Need to Earn If

question 21

Multiple Choice

What annual interest rate would you need to earn if you wanted a $200 per month contribution to grow to $14,700 in five years?

• A) 6.47 percent
• B) 7.76 percent
• C) 8.01 percent
• D) 14.70 percent

---

Definitions:

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and labor expenses.

Exponentiation

A mathematical operation involving two numbers, the base and the exponent, indicating how many times the base is multiplied by itself.

Principle Amount

The original sum of money borrowed in a loan or put into an investment.

Time

A continuous, measurable quantity in which events occur in a sequence from the past through the present to the future.