A pension account has $150,000 invested in a mutual fund, and expects a 6.4% annual return. After how many years would this investment reach a value greater than $200,000?

With annual compounding, the account value after n years is $150,000 × 1.064ⁿ. After 4 years it is about $192,300, still below $200,000; after 5 years it is about $204,600. So the investment first exceeds $200,000 after 5 years, choice B.

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