What annual rate of return is earned on a $895 investment that grows to $1,976 in eight years?
A)9.14 percent
B)9.97 percent
C)10.41 percent
D)11.73 percent

Question

Quizplus · Accepted Answer

To find the annual rate of return, we can use the formula:

Future Value = Present Value x (1 + R)^N

Where:
R = Annual Rate of Return
N = Number of Years

Plugging in the given values, we get:

$1,976 = $895 x (1 + R)^8

Solving for R using algebra, we get:
R = 10.41%

Therefore, the answer is choice C, 10.41%.

What Annual Rate of Return Is Earned on a $895