An Investment of $500 Is Made in a Trust Fund $13.89$

question 107

Multiple Choice

An investment of $500 is made in a trust fund at an annual interest rate of 5%, compounded monthly. How long will it take for the investment to double? Give your answer to two decimal places.

• A) \(13.89\) years
• B) \(166.70\) years
• C) \(1.06\) years
• D) \(13.86\) years
• E) \(20.00\) years

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Definitions:

Market Value

The ongoing cost in the market for an asset or service to be sold or bought.

Investment Cost

The total expenses incurred in purchasing an asset, including the price of the asset plus any additional fees or charges.

Return on Investment

A measure of the profitability of an investment, calculated as the net profit from the investment divided by the initial cost of the investment.

Dividends

Disbursements issued by a company to its shareholders, representing a share of the company's earnings distributed to its stock owners.