Solving for Rates What Annual Rate of Return Is Earned

question 125

Multiple Choice

Solving for Rates What annual rate of return is earned on a $10,000 investment when it grows to $15,000 in ten years?

• A) 1.50%
• B) 3.97%
• C) 4.14%
• D) 5.00%

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Definitions:

Increasing

A term indicating growth or an upward trend in quantitative measures or metrics, such as increasing sales, profits, or productivity.

Increasing

Refers to a situation or quantity that is becoming greater over time.

Annual Growth Rate

The percentage increase in the value of a particular investment or portfolio over the period of a year.

Discounting

The process of determining the present value of a future amount of money or stream of cash flows given a specific rate of return.