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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

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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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.
Transcribed Image Text: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.
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