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    Question

    An investment grows by 8% in the first year, 12% in the

    second year, and 10% in the third year. If the initial amount invested is $1,000, what is the final amount after 3 years and the overall percentage increase?
    A $1,330.56, 33.056%. Correct Answer Incorrect Answer
    B $1,130.56, 33.056%. Correct Answer Incorrect Answer
    C $1,330.56, 23.056%. Correct Answer Incorrect Answer
    D $1,220.50, 30.125%. Correct Answer Incorrect Answer
    E $1,080.25, 25.426%. Correct Answer Incorrect Answer

    Solution

    Initial amount = $1,000.  Amount after 8% increase = $1,000 × 1.08 = $1,080.  Amount after 12% increase = $1,080 × 1.12 = $1,209.60.  Amount after 10% increase = $1,209.60 × 1.10 = $1,330.56.  Overall percentage increase = ((1,330.56 - 1,000) / 1,000) × 100 = 33.056%.  The final amount is $1,330.56 , and the overall percentage increase is 33.056%.

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