TOPIC

Economics – Question 10

QUESTION

I invested $20,000 in the Guardian Angel mutual fund. At the end of three years, I received $18,000 and at the end of six years, I received $12,000. What rate of return did I receive on the investment?

(A) 7.5%

(B) 8.5%

(C) 9.5%

(D) 10.5%

HINT

The rate of return is defined as the interest rate where PW of cost = PW of benefits

ACKNOWLEDGEMENT

This question of the day was provided by the courtesy of Professor Ram Pendyala, a contributor of the Fundamentals of Engineering Examination Question of the Day site at the University of South Florida.