Asked by haneefa etimady on May 11, 2024
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Your client plans to invest $2,000 at the end of each year. The rate of return on the investment is 7.5% compounded annually. What will be the value of the investment at the end of 12 years? (Taken from CIFP course materials.)
Compounded Annually
Compounded annually refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods once a year.
Rate of Return
The increase or decrease in the value of an investment during a set timeframe, represented as a proportion of the investment's starting price.
- Assess the monetary value of steady contributions to savings strategies through time, acknowledging the role of compound interest.
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CM
Learning Objectives
- Assess the monetary value of steady contributions to savings strategies through time, acknowledging the role of compound interest.