Byron is investigating a mutual fund that claims that $1,000 today will be worth $5,000 in five years. What is he solving for?
A) Present value
B) Future value
C) Interest rate
D) Payment

Question

Quizplus · Accepted Answer

Byron is solving for the interest rate because he knows the present value ($1,000) and the future value ($5,000) and wants to find out the rate at which the initial amount will grow to reach the future amount in a specified time period (five years).

Byron Is Investigating a Mutual Fund That Claims That $1,000