Suppose You Invest $5,000 for 5 Years

question 7

Essay

Suppose you invest $5,000 for 5 years.The interest rate for the first 2 years is 4.7%,5.2% for year 3 and 5.4% for the final 2 years.Assuming interest compounds annually,what would your investment have returned in those 5 years?

---

Definitions:

Vertical Analysis

A method used in financial statement analysis where each line item is listed as a percentage of a base figure, enabling comparison across different periods or companies.

Horizontal Analysis

An analysis tool used in financial statement analysis to compare historical data, such as revenues and earnings, across different periods.

Percentage Change

A mathematical calculation that depicts the degree of change over time, often used to compare the difference in quantities or values.

Solvency Ratio

A key metric used to measure a company's ability to meet its long-term debt obligations and financial liabilities.