What annual rate of return is earned on a $13,000 investment made in year 2 when it grows to $17,000 by the end of year 7?
A) 10.64%
B) 4.28%
C) 8.04%
D) 5.51%

Question

Quizplus · Accepted Answer

The annual rate of return can be calculated using the formula for compound interest: $ A = P(1 + r)^n $. Solving for $ r $ when $ A = 17000 $, $ P = 13000 $, and $ n = 5 $ years gives approximately 5.51%.

What Annual Rate of Return Is Earned on a $13,000