What Effective Interest Rate Will Frankie Have to Earn If

question 38

Multiple Choice

What effective interest rate will Frankie have to earn if his investments of $2,000 at the end of every three months for 20 years are to have a maturity value in 20 years of $1,000,000?

• A) 11.56%
• B) 13.81%
• C) 15.29%
• D) 16.19%
• E) 17.49%

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Definitions:

Economic Feasibility

Assessment of the financial aspects of a project or system to evaluate whether the projected benefits outweigh the costs, ensuring it is economically viable.

Financial Risk

The possibility of losing money on an investment or business venture.

Project Completion

The final stage in a project where all tasks have been finished and the project objectives have been met.

SDLC

The Software Development Life Cycle is a methodology used for organizing, developing, testing, and launching an information system.