we have $1,000 and we are offered to put it in investments that will double this money in 8 years, what is the annual rate of return? Select one: O a

Finance Aug 13, 2020

we have $1,000 and we are offered to put it in investments that will double this money in 8 years, what is the annual rate of return? Select one: O a. 8% b. 10% O c. 9% d. 6%

Expert Solution

The annual rate of return is computed as shown below:

Future value = Present value x (1 + r)ⁿ

$ 2,000 = $ 1,000 x (1 + r)⁸

2 ^{1 / 8} - 1 = r

r = 9% Approximately

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