Monika has $6,000 in her investment account. She wants to withdraw her funds when her account reaches $10,000. A decrease in the rate of return she earns will:
A) Increase the value of her account faster.
B) Cause her to wait longer before withdrawing her money.
C) Cause the present value of her account to decrease.
D) Allow her to withdraw more money sooner.
E) Cause the compounding effect to increase.

Question

Quizplus · Accepted Answer

A decrease in the rate of return will slow the growth of her investment, meaning it will take longer for the account to reach her target of $10,000, thus delaying her ability to withdraw the funds.

Monika Has $6,000 in Her Investment Account