If I invest $50,000 today for 5 years and it grows to $84,253,what rate of interest have I received?
A)5%.
B)6%.
C)11%.
D)12%.

Question

Quizplus · Accepted Answer

To find out the rate of interest, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
P = Principal amount
r = Annual nominal interest rate
n = Number of times the interest is compounded per year
t = Time in years
A = Final amount

Here, P = $50,000, A = $84,253, t = 5 years, and assuming the interest is compounded annually, we can rearrange the formula to solve for r:

r = (n((A/P)^(1/nt)) - 1) x 100%

Plugging in the values, we get:

r = (1((84,253/50,000)^(1/(1x5))) - 1) x 100%
r = 10.87%

Therefore, the rate of interest received is approximately 11%. The closest answer choice is C) 11%.

If I Invest $50,000 Today for 5 Years and It