Using decimal multipliers, it is found that a rate of return of 5.2% in the third year will produce a cumulative gain of 16%.
The <u>decimal multiplier</u> for a increase of a% is given by:
In this problem, two increases of 5%, thus:
Another of x, that we want to find, and the result is a increase of 16%, thus:
The three increases(5%, 5% and x%) result in a increase of 16%, thus:
1.052 - 1 = 0.052
A rate of return of 5.2% in the third year will produce a cumulative gain of 16%.
A similar problem is given at brainly.com/question/21806362