You invested $1,000 for five years in an account that earns 5 percent. However, today you learn that you are able to move the account into an investment that earns 10 percent. Which of the following statements is correct?
A) If you select the investment earning 10 percent, you will double your profit.
B) If you select the investment earning 10 percent, you will more than double your profit.
C) If you select the investment earning 10 percent, your profit will be less than double.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

Moving the investment from a 5% return to a 10% return significantly increases the profit, more than doubling it due to the effect of compound interest over the remaining period.

You Invested $1,000 for Five Years in an Account That