A $200 investment earns 5% annual return. After 1 year, value is?

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Multiple Choice

A $200 investment earns 5% annual return. After 1 year, value is?

Explanation:
When a value grows by a percentage, you multiply the original amount by 1 plus the rate. Here, 5% of 200 is 200 × 0.05 = 10. Add that to the original 200 to get 210. So after one year, the value is 210. The other numbers would require different changes: 190 would be a loss, 200 would mean no growth, and 205 would be a smaller percentage increase (2.5%), not 5%.

When a value grows by a percentage, you multiply the original amount by 1 plus the rate. Here, 5% of 200 is 200 × 0.05 = 10. Add that to the original 200 to get 210. So after one year, the value is 210. The other numbers would require different changes: 190 would be a loss, 200 would mean no growth, and 205 would be a smaller percentage increase (2.5%), not 5%.

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