Twenty years ago, you began investing $2,000 a year. Because your investments earned an average of 8 percent a year, your investment portfolio has a current dollar value of $92,000.

How much did you earn on your investments over the 20-year period of time?

a) $40,000 b) $92,000 c) $132,000 d) $2,000 e) $52,000

Question

Isabell Garcia

Business

22 September, 07:24

Twenty years ago, you began investing $2,000 a year. Because your investments earned an average of 8 percent a year, your investment portfolio has a current dollar value of $92,000.

How much did you earn on your investments over the 20-year period of time?

a) $40,000 b) $92,000 c) $132,000 d) $2,000 e) $52,000

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Answers (1)

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Alyssa Garner · Answer 1

E) $52,000

Explanation:

total principal invested = $2,000 per year x 20 years = $40,000

current value of the investment portfolio = $92,000

the investment portfolio's earned interests = $92,000 - $40,000 = $52,000

The amount of money that is paid for an investment above the principal is called the interest.