Miles invested $5,000 ten years ago and expected to have $10,000 today. He has neither added nor withdrawn any money since his initial investment. All interest was reinvested and compounded annually. As it turns out, he only has $8,400 in his account today. Which one of the following statements must be true?
Multiple Choice
He earned simple interest rather than compound interest.
He ignored the Rule of 72, which caused his account to decrease in value.
The future value interest factor turned out to be higher than he expected.
He did not earn any interest on interest.
He earned a lower interest rate than he expected.