At What Annual Rate Would $500 Grow to $1,948 in 12

question 49

Essay

At what annual rate would $500 grow to $1,948 in 12 years? (Note-Solve as a Present Value problem.)
(a)12.0 percent
(b)13.0 percent
(c)12.5 percent
(d)11.0 percent

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Definitions:

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life.

After-Tax Annual Lease Payment

The amount of money paid every year for a lease after accounting for taxes.

Tax Rate

The fraction of earnings or revenue that governmental bodies levy as tax from individuals or corporations.

Straight-Line Depreciation

A process for allocating the cost of a physical asset across its usable life in identical annual payments.