Your Investment Account Pays 8

question 88

Multiple Choice

Your investment account pays 8.0%, compounded annually.If you invest $5, 000 today, how many years will it take for your investment to grow to $9, 140.20?

• A) 5.14
• B) 5.71
• C) 6.35
• D) 7.05
• E) 7.84

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Definitions:

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of nominal GDP to the money supply.

Actual Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, as measured over a specific period of time.

Actual Price Level

The current cost of goods and services in an economy, affecting purchasing power and inflation rates.

Velocity

The rate at which money circulates or is exchanged in an economy, influencing inflation and economic activity.