Five Years Ago, Precision Tool Set Aside $50,000 in Case

question 268

Multiple Choice

Five years ago, Precision Tool set aside $50,000 in case of a financial emergency. Today, that account has increased in value to $64,397. What rate of interest is the firm earning on this money?

• A) 5.19%
• B) 5.47%
• C) 6.18%
• D) 6.32%
• E) 6.45%

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Definitions:

Statement Of Cash Flows

Explains how the company’s cash changed from the beginning of the accounting period to the end.

Accounting Period

A specific period of time used for financial reporting purposes, typically a year or quarter.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, giving insight into its financial health.