An Initial Investment of $557

question 26

Multiple Choice

An initial investment of $557.33 grows at a rate of 5 percent per year.What is the value of the investment after 4 years? Round your answer to the nearest cent. ​

• A) $585.20
• B) $668.80
• C) $677.44
• D) None of the above

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Definitions:

Equal Cash Flow

A scenario in which cash inflows or outflows are the same in each period.

Internal Rate of Return Method

A capital budgeting method that calculates the return on investment by setting the net present value of cash flows equal to zero.

Present Value

Today's worth of a forthcoming sum of money or series of cash payments, considering a designated rate of return.

Capital Investment Analysis

The process of evaluating and comparing potential investments or expenditures to determine their profitability and financial impact on the business.