Winston Baker wants to invest $25,000 in a spa that his sister is starting. He will triple his investment in six years. What is the rate of return that Winston is being promised? (Rounded to the nearest percent.)
A) 18%
B) 20%
C) 12%
D) 25%

Question

Quizplus · Accepted Answer

To triple the investment in six years, the future value is $75,000. Using the formula for compound interest: FV = PV * (1 + r)^n, where FV is the future value, PV is the present value, r is the rate, and n is the number of years. Solving for r gives approximately 20%.

Winston Baker Wants to Invest $25,000 in a Spa That