Question

Four years ago, Saul invested $500. Three years ago, Trek invested $600. Today, these two investments...

Four years ago, Saul invested $500. Three years ago, Trek invested $600. Today, these two investments are each worth $800. Assume each account continues to earn its respective rate of return. Which one of the following statements is correct concerning these investments? Please show your reasonings.

A) Three years from today, Trek's investment will be worth more than Saul's.

B) One year ago, Saul's investment was worth less than Trek's investment.

C) Trek earns a higher rate of return than Saul.

D) Trek has earned an average annual interest rate of 9.86 percent.

E) Saul has earned an average annual interest rate of 12.64 percent.

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Answer is: B) One year ago, Saul's investment was worth less than Trek's investment.

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