Question

One year ago, you invested $2,700.00. Today, it is worth $3,500.00. What rate of interest did you earn?

rev: 08_19_2016_QC_CS-57596

A.3.38 percent

B.2.47 percent

C.4.38 percent

D.14.82 percent

E.29.63 percent

Answer 1

Solution:
	Answer is E. 29.63 %
Working Notes:
	C0 = Investment = $2,700
	FV=Future worth of the investment after n years =$3,500
	r=rate of interest = r% compounded annually
	n = no. Of periods = 1 year
	Using future value formula
	FV= C0 x (1+r)^n
	3500=2700(1+r)^1
	1+r= 3500/2700
	r=1.296296 - 1
	r= 0.296296
	r=29.63%
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