If Alvin Invests $5,500 Today in a Savings Account, the Money

question 50

Multiple Choice

If Alvin invests $5,500 today in a savings account, the money will grow to $8,500 at the end of Year 4. Assuming that the interest is paid once per year, the effective annual rate of the investment is _____. 

• A)10.8%
• B)11.5%
• C)12.2%
• D)12.9%
• E)13.6%

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Definitions:

Flat-Topped Acacia

A type of acacia tree characterized by its distinctive flattened crown, commonly found in African savannas.

Biome

A large community of plants and animals that occupies a distinct region defined by its climate and ecosystems.

Savanna Grassland

A ecosystem characterized by a mix of grasses and scattered trees, found in tropical and subtropical regions with seasonal rainfall.

Littoral Zone

Shore zone between high-tide mark and low-tide mark; also, shallow water of a lake where light penetrates to the bottom.