Ben invested $20,000 into a money market account and took out $5,000 at the end of year 5. He found out at the end of 10 years that he had as of $50,000 in the account.
What is the annual interest rate Ben had earned on this investment?

Question

Quizplus · Accepted Answer

To find the annual interest rate, we use the formula for compound interest: A = P(1 + r)^n. After 5 years, Ben withdrew $5,000, leaving $15,000. The account grew to $50,000 in 10 years. Solving for r gives approximately 11.38%.

Ben Invested $20,000 into a Money Market Account and Took