If Teddy Godfried Invests $10,000 Today in an Account Compounding

question 100

Multiple Choice

If Teddy Godfried invests $10,000 today in an account compounding yearly, and he wants his money to at least double within 10 years, what interest rate is needed?
$\begin{array}{|c|c|c|c|c|c|c|}\hline\text { Future } \\\text { Value of } \\\$ 1\\\hline&4\%&5\%&6\%&7\%&8\%&9\%\\\hline 1& 1.040 & 1.050 & 1.060 & 1.070 & 1.080 & 1.090 \\\hline 2& 1.082 & 1.103 & 1.124 & 1.145 & 1.166 & 1 .188 \\\hline 3 & 1.125 & 1.158 & 1.191 & 1.225 & 1.260 &1.295 \\\hline 4 & 1.170 & 1.216 & 1.261 & 1.311 & 1.360 &1.412 \\\hline 5 & 1.217 & 1.276 & 1.338 & 1.403 & 1.469 & 1.539\\\hline 6 & 1.265 & 1.340 & 1.410 & 1.501 & 1.587 &1.677 \\\hline 7 & 1.316 & 1.407 & 1.504 & 1.606 & 1.714 &1.828 \\\hline 8 & 1.369 & 1.477 & 1.594 & 1.718 & 1.851 &1.993 \\\hline 9 & 1.423 & 1.551 & 1.689 & 1.838 & 1.999 & 2.172 \\\hline 10& 1.480 & 1.629 & 1.791 &1.967 & 2.159 &2.367 \\\hline\end{array}$

• A) 5%
• B) 6%
• C) 7%
• D) 8%

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Definitions:

Investment Center

A division or unit within a company for which the manager has control over costs, revenues, and investments, and is responsible for generating a return on the assets employed.

Income

The total amount of revenue or gain received by an individual or company, from various sources such as salary, investments, or business operations, before any deductions or taxes.

Sales

The transactions involving the exchange of goods or services for money, representing the primary source of revenue for most businesses.

Production Departments

Specific divisions within a manufacturing facility where distinct stages of the production process are carried out.