Section: Mathematics

3) Hank invests $500.00 in a stock. The first year the stock earns an 8% return on his money. If Hank sells his stock, how much money does he have at the end of year one?

1. $40.00
2. $500.00
3. $508.00
4. $540.00
5. Not enough information provided.

This problem requires you to multiply the principal amount ($500.00) by the the interest rate and then add that amount to the principal. This can be expressed as:

$500 * 1.08 which equals $540.00