$1200 is invested at a given interest rate for two years. The difference between the simple 2-year non-compounded return at the end of the two years and an annually compounded return is $132. What is the interest rate?
Pick
A) 10%
B) 11%
C) 12%
D) 13%
E) 14%
For first year there will not be any difference in interest accrued using either Non-compounded or compounded rate. This means that the difference that has accrued must be the result of one year simple interest rate.   Option A will give 120   Option 11% will give 132 - Our Answer   Answer 11%
<result>B</result>
$1200 is invested at a given interest rate for two years. The difference between the simple 2-year non-compounded return at the end of the two years and an annually compounded return is $132. What is the interest rate?