Sixteen years ago, Alicia invested $500. Eight years ago, Travis invested $900. Today, both Alicia's and Travis' investments

One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn?    A.  6.59 percent B.  6.67 percent C.  6.88 percent D.  6.92 percent E.  7.01 percent $1,924.62 = $1,800 × (1 + r)1; r = 6.92 percent

43.

According to the Rule of 72, you can do which one of the following?    A.  double your money in five years at 7.2 percent interest B.  double your money in 7.2 years at 8 percent interest C.  double your money in 5 years at 14.4 percent interest D.  triple your money in 7.2 years at 5 percent interest E.  triple your money at 10 percent interest in 7.2 years Rule of 72 = 72/5 years = 14.4 percent interest

44.

Forty years ago, your mother invested $5,000. Today, that investment is worth $430,065.11. What is the average annual rate of return she earned on this investment?    A.  11.68 percent B.  11.71 percent C.  11.78 percent D.  11.91 percent E.  12.02 percent $430,065.11 = $5,000 × (1 + r)40; r = 11.78 percent

45.

Sixteen years ago, Alicia invested $500. Eight years ago, Travis invested $900. Today, both Alicia's and Travis' investments are each worth $2,400. Assume that both Alicia and Travis continue to earn their respective rates of return. Which one of the following statements is correct concerning these investments?    A.  Three years from today, Travis' investment will be worth more than Alicia's. B.  One year ago, Alicia's investment was worth more than Travis' investment. C.  Travis earns a higher rate of return than Alicia. D.  Travis has earned an average annual interest rate of 3.37 percent. E.  Alicia has earned an average annual interest rate of 6.01 percent. Alicia: $2,400 = $500 × (1 + r)16; r = 10.30 percent Travis: $2,400 = $900 × (1 + r)8; r = 13.04 percent   Since both Alicia and Travis have equal account values today and since Travis earns the higher rate of return, his account had to be worth less than Alicia's account one year ago.