What Effective Annual Rate of Return (EAR) Would Rayne Need

question 161

Multiple Choice

What effective annual rate of return (EAR) would Rayne need to earn if she deposits $1,000 per month into an account beginning one month from today in order to have a total of $1,000,000 in 30 years?

• A) 5.98%
• B) 6.55%
• C) 4.87%
• D) 6.14%

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Definitions:

Psychological Ability

The capacity of the human mind to comprehend, reason, and solve problems effectively.

Domestication

The process by which humans modify the genetic traits of plants and animals to better suit human needs, through selective breeding and cultivation.

Production

The process of creating, manufacturing, or producing goods and services, often viewed as a critical component of economic systems.

Instability

A state of unpredictability or potential for change that can affect systems, nations, markets, or personal circumstances often negatively.