What Rate of Return (Compounded Monthly)will You Need,to Reach a Lump-Sum

question 53

Multiple Choice

What rate of return (compounded monthly) will you need,to reach a lump-sum total of $500000 in 20 years if you contribute $500 per month?

• A)12.1 percent
• B)8)9 percent
• C)13.2 percent
• D)7)31 percent

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Definitions:

Return On Assets

A financial ratio that measures how efficiently a company uses its assets to generate profit.

Nonoperating Investments

Investments made by a company that are not related to its primary business operations, often including stocks, bonds, or real estate.

Family Investment Funds

Private financial pools contributed by family members to invest in various ventures or securities.

Enterprising Families

Families that engage in entrepreneurial ventures, often spanning multiple generations with a focus on innovation and business growth.