Question 1: If a principle of $4000 is invested at an interest rate of 6%, how many years will it be until the investment has grown to $5000 if the interest is compounded continuously? Use the formula A = Pet. Round to the nearest 0.01 years. Question 2: At what rate should $10000 be invested so that after 11 years, the investment will have grown to $68000? Round your answer to the nearest 0.01 percent. For example, 5¹% interest should be expressed as 5.25. Do not include the percent symbol in your answer. M

Question 1: If a principle of $4000 is invested at an interest rate of 6%, how many years will it be until the investment has grown to $5000 if the interest is compounded continuously? Use the formula A = Pet. Round to the nearest 0.01 years. Question 2: At what rate should $10000 be invested so that after 11 years, the investment will have grown to $68000? Round your answer to the nearest 0.01 percent. For example, 5¹% interest should be expressed as 5.25. Do not include the percent symbol in your answer. M

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Determine the present value, P, you must invest to have the future value, A, at simple interest rate r after time t. Round answer to the nearest dollar. A=$5,000, r=8.2%, t=5 years
Using the Rule of 72, approximately how many years are needed to double a $100 investment when interest rates are 5.25 percent per year? (Round your answer to 2 declmal places.) Period years < Prev o of 10 e here to search Eゴ ( F4 F5 F7 F10 F11 F12 76 #
Problem 1: You can choose between two different investments: (A) an annuity that pays $10,000 each year for the next 6 years; (B) a perpetuity that pays $10,000 forever, starting 11 years from now. 1. Which investment do you choose, A or B, if the interest rate is 5%? What if it is 10%? Explain in words the reason behind your choices.
(Solving for n with nonannual periods) About how many years would it take for your investment to grow twofold if it were invested at an APR of 14 percent compounded weekly? If you invest $1 at an APR of 14 percent compounded weekly, about how many years would it take for your investment to grow twofold to $2? years (Round to the nearest whole number.)
(Solving for n with nonannual periods) About how many years would it take for your investment to grow threefold if it were invested at an APR of 11 percent compounded annually? If you invest $1 at an APR of 11 percent compounded annually, about how many years would it take for your investment to grow threefold to S3? lyears (Round to the nearest whole number.)
Suppose the term structure of risk-free interest rates is as shown here: a. Calculate the present value of an investment that pays $1,000 in 2 years and $4,000 in 5 years for certain. b. Calculate the present value of receiving $900 per year, with certainty, at the end of the next 5 years. To find the rates for the missing years in the table, linearly interpolate between the years for which you do know the rates. (For example, the rate in year 4 would be the average rate in year 3 and year 5.) c. Calculate the present value of receiving $2,700 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 2 years 3 years 5 years 7 years 1 year 2.06 2.44 2.64 3.22 3.74 Term Rate (EAR, %) Print Done 10 years 4.25 20 years 5.09 I X t cent.)
You are required to find how long it will take a sum of money (or anything else) to grow to some specified amount with a certain compound interest rate. Specifically, if a company’s investment has a real rate of return of 4% per year and the inflation rate is 6% per year, approximately how long will it take for the investment to triple?
Determine the present value P you must invest to have the future value A at simple interest rate r after time t. A = $14,000, r = 7.5%, t = 8 years
The interest rate required for a $2,050 investment to double in 5 years can be found from this equation: 4,100=2,050(1+r2)104,100=2,0501+r210 . Find the necessary rate. Your answer should be a decimal, but express it as a percentage to 2 decimal places: The rate is %
4. The future value of an investment after 5 years was $12500. If the initial investment had been $8000 what was the annual rate of interest earned on this investment had it been compounded annually? N = 1% = PV = PMT = FV = P/Y = C/Y =
can somebody help me？ thanks K means compound k times a year.
Mr. Sultan has bought a JBL Boombox, for HKD 2,000, PlayStation for HKD 4,000, and three Briefcases for HKD 25,000, during a shopping spree in Hong Kong. The spot exchange rate is HKD/AUD 5. (A) What should the Price JBL Boombox, PlayStation, and three Briefcases cost in Australia? (B) Suppose Mr. Sultan is stopped at customs as he arrives in Sydney, and must pay import duties of 20 percent. If the same JBL Boombox, PlayStation, and three Briefcases cost AUD 450, AUD 1,500, and AUD 8,000 in Australia, respectively, was his shopping spree worth at least the HKD 10,000 paid for airfare and hotels during his trip?

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