If an Amount of Money, Called the Principal, P, Is $\mathrm { A } = \mathrm { P } ( 1 + \mathrm { r } ) ^ { 2 }$

question 171

Multiple Choice

If an amount of money, called the principal, P, is deposited into an account that earns interest at a rate r, compounded annually, then in two years that investment will grow to an amount A, given by the formula $\mathrm { A } = \mathrm { P } ( 1 + \mathrm { r } ) ^ { 2 }$ If a principal amount of $4500 grows to $5445.00 in two years, what is the interest rate?

• A) 12%
• B) 10%
• C) 8%
• D) 11%

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Definitions:

Profit-Maximizing

The process of adjusting production and sale strategies to achieve the highest possible profit.

Pure Monopolist

Refers to a market structure where a single firm is the sole provider of a good or service with no close substitutes, giving it significant control over prices.

Profit-Maximizing

The strategy or process that companies or individuals employ to achieve the highest possible profit from their operations, taking into account factors like production costs, market demand, and pricing strategies.

Pure Monopolist

A market participant that has complete control over the market for a particular good or service, with no close substitutes.