The Annual Rate of Return on an Initial Investment of P

question 2

Multiple Choice

The annual rate of return on an initial investment of P dollars is given by $r = \left( \frac { A } { P } \right) ^ { 1 / t } - 1$ where A is the current value and t is the number of years since the money was invested. Find the annual rate of return on a $22,000 investment that grew to $32,000 after 10 years. Round to the
Nearest hundredth of a percent.

• A) 13.82%
• B) 23.82%
• C) 0.04%
• D) 3.82%

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Definitions:

Federal Income Tax Rates

A schedule of rates set by the government applied to the taxable income of individuals, corporations, and other entities.

Wealth Concentration

The scenario where a small percentage of people or entities hold a large portion of total wealth in a society.

Income Distribution

Refers to how a country’s total GDP is spread amongst its population, affecting economic equality and citizens' standard of living.

Last Three Decades

Refers to the most recent thirty-year period. Depending on context, this can relate to economic trends, technological advancements, or societal changes that have occurred within that timeframe.