If a Canadian Savings bond can be purchased for $29.50 and has a maturity value at the end of 25 years of $100, what is the annual rate of return on the bond?
A)5%
B)6%
C)7%
D)8%

Question

Quizplus · Accepted Answer

The annual rate of return can be calculated using the formula for compound interest: $ FV = PV \times (1 + r)^n $. Solving for $ r $ with $ FV = 100 $, $ PV = 29.50 $, and $ n = 25 $, the rate $ r $ is approximately 5%.

If a Canadian Savings Bond Can Be Purchased for $29