An Account Was Opened with an Investment of $1,000 Ten

question 180

Multiple Choice

An account was opened with an investment of $1,000 ten years ago. The ending balance in the account is $1,500. If interest was compounded annually, what rate was earned on the account?

• A) 1.0%
• B) 2.2%
• C) 2.9%
• D) 3.8%
• E) 4.1%

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Definitions:

Incidence of Taxation

Refers to who ultimately bears the financial burden of a tax, which can differ from who initially pays the tax.

Society

A community of individuals living in a structured and organized way, sharing customs, laws, and organizations.

Tax Structure

The system and various rates at which individuals and entities are taxed by government authorities.

Elasticity of Demand

A measure of how sensitive the quantity demanded of a good or service is to a change in its price, indicating how changes in price affect consumer demand.