Suppose an investor can earn a steady 5% annually with investment A,while investment B will yield a constant 12% annually.Within 11 years' time,the compounded value of investment B will be more than twice the compounded value of investment A (ignore risk).

Question

Quizplus · Accepted Answer

Investment B will have a higher compounded value than investment A within 11 years because of its higher annual yield. This means that investment B will grow faster and reach the desired value more quickly than investment A. Since investment B will be more than twice the compounded value of investment A within 11 years, this statement is true.

Suppose an Investor Can Earn a Steady 5% Annually with Investment