
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
![### Investment Problem
**Question:**
Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)*
**Input Box:**
- [___________] years
#### Explanation:
This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859.
The solution requires using the formula for compound interest:
\[ A = P(1 + r)^t \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($19,000 in this case).
- \( r \) is the annual interest rate (0.09 here).
- \( t \) is the time the money is invested for in years.
The task is to find \( t \) when \( A = 37,859 \).](https://content.bartleby.com/qna-images/question/b7b9bc12-9bec-475d-bc99-e13d2a9b76e2/a50837fb-401c-455c-8b0b-563f59c9a946/gikaw3.jpeg)
Transcribed Image Text:### Investment Problem
**Question:**
Sally Ross has $19,000 to invest today at 9% to pay a debt of $37,859. How many years will it take her to accumulate enough to liquidate the debt? *(Round answer to 0 decimal places, e.g., 45.)*
**Input Box:**
- [___________] years
#### Explanation:
This problem involves calculating the time required for an investment to grow to a certain amount using a specified interest rate. Sally aims to accumulate sufficient funds with an initial investment of $19,000 at an annual interest rate of 9% to pay off a debt of $37,859.
The solution requires using the formula for compound interest:
\[ A = P(1 + r)^t \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount ($19,000 in this case).
- \( r \) is the annual interest rate (0.09 here).
- \( t \) is the time the money is invested for in years.
The task is to find \( t \) when \( A = 37,859 \).
Expert Solution

arrow_forward
Step 1
It can be calculated using Nper function in excel
=NPER(rate,pmt,pv,[fv],[type])
- Rate The interest rate for the loan.
- Nper The total number of payments for the loan.
- Pmt payment per period
- Pv The present value
- Fv The future value
- Type The number 0 (zero) or 1 and indicates when payments are due.
Step by stepSolved in 3 steps with 1 images

Knowledge Booster
Similar questions
- i need al answer a, b ,carrow_forwardYou invest $17,000 at 6% interest, compounded monthly, for 2 years. Use the compound interest formula to calculate the compound amount (in $) for your investment. (Round your answer to the nearest cent.) $___________ ****(FYI: It is not $2,161.72)*****arrow_forwardJessica borrowed $3000 from a lender that charged simple interest at an annual rate of 8%. When Jessica paid off the loan, she paid $960 in interest. How long was the loan for, in years? If necessary, refer to the list of financial formulas. Tab years Continue 50°F Mostly cloudy A 32 2 W S X # 3 D E X D $ C R S DIC F % 5 € T G 6 H C Y V B & 7 H a 7 Submit Assignment © 2022 McGraw Hill LLC. All Rights Reserved. Terms of Use | Privacy Center | Accessibility 27 N *00 8 UA 8 W X 9 5 M 9 K PDF 2 6 1 2 Pit Sc Pause Br 5:55 PM 11/1/2022 ? Garrow_forward
- T5.arrow_forwardHow much should be invested at 6% to have $1900 at the end of 4.5 years? (Round your final answer to two decimal places.)$ ____ Andy borrowed $9500 for 3 1/2 years at a simple interest rate of 4.7%. Find the total interest paid over this period. $ ____ Thank youarrow_forward3 decimal places final answer......thanksarrow_forward
- Use the formula FV = P(1 + R)N Rigoberto invests $8,000, at 6% interest, compounded semiannually for 1 year.How much interest will he earn on his investment?arrow_forwardAt the end of each quarter, Patti deposits $1,200 into an account that pays 10% interest compounded quarterly How much will Patti have in the account in five years? (EV of $1. PV of $1. EVA of S1, and PVA of 5) (Use appropriate factor(s) from the tables provided) Multiple Choice $30.654 $36.654 $31854 $30,854arrow_forwardCompute the value in 14 years of a $4,000 deposit earning 13 percent per year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education