If you invest $1,000 in a security that provides a return of 4% the first year, 0% the second year, and 6% the third year, the value of your investment at the end of the third years is closest to:
A) $0
B) $1,102.40
C) $1,157.63
D) $1,092.73

Question

Quizplus · Accepted Answer

The investment grows by 4% in the first year, so it becomes $1,000 * 1.04 = $1,040. In the second year, there's no growth, so it remains $1,040. In the third year, it grows by 6%, becoming $1,040 * 1.06 = $1,102.40.

If You Invest $1,000 in a Security That Provides a Return