(Advanced analysis) Kara has $2,000 to invest today that she wants to grow to $3,000 in five years.What annually compounded rate of interest would she have to earn to reach her goal?
A)4.6 percent
B)6.5 percent
C)8.4 percent
D)9.3 percent

Question

Quizplus · Accepted Answer

To find the annually compounded rate of interest, we use the formula for compound interest: $ FV = PV \times (1 + r)^n $. Here, $ FV = 3000 $, $ PV = 2000 $, and $ n = 5 $. Solving for $ r $, we get $ r \approx 0.084 $ or 8.4%.

(Advanced Analysis) Kara Has $2,000 to Invest Today That She