What Rate of Interest Was Earned for $2,000 to Accumulate

question 30

Multiple Choice

What rate of interest was earned for $2,000 to accumulate to be $26,362 after 10 years?

• A)4%
• B)5%
• C)6%
• D)7%
• E)8%

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Definitions:

Interest Payments

Periodic payments made to lenders or bondholders as compensation for lending their money.

Nominal Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, representing the actual annual cost of borrowing.

Compounded Quarterly

The process where interest is calculated and added to the principal sum of an investment or loan on a quarterly basis.

Lifetime Subscription

A one-time payment plan for a product or service that grants the subscriber access for the lifetime of the product or service.