Lucia has just celebrated her one-year anniversary at her job. She started investing in the company's retirement savings program a year ago, and she is curious how her investments have performed. Over the year she invested a total of $4000 into the retirement savings program, and today her account is worth $4700. What is Lucia's rate of return?

Question

Quizplus · Accepted Answer

To find Lucia's rate of return we need to use the formula:

Rate of return = ((final value - initial value) / initial value) x 100

We know the initial value (the amount Lucia invested) was $4000 and the final value (her account balance after one year) is $4700.

Plugging these numbers into the formula we get:

Rate of return = (($4700 - $4000) / $4000) x 100

Rate of return = (0.175) x 100

Rate of return = 17.5%

Therefore, Lucia's rate of return is 17.5%, which corresponds to answer choice C).

Lucia Has Just Celebrated Her One-Year Anniversary at Her Job