Use the formula for the effective rate (annual effective yield) reff = (A/P)1/t − 1 where P is an initial investment in dollars, A is an accumulated amount in dollars, and t is time in years, to solve the exercise. Martha invested $50,000 in a boutique 6 years ago. Her investment is worth $80,000 today. What is the effective rate (annual effective yield) of her investment?

Use the formula for the effective rate (annual effective yield) reff = (A/P)1/t − 1 where P is an initial investment in dollars, A is an accumulated amount in dollars, and t is time in years, to solve the exercise. Martha invested $50,000 in a boutique 6 years ago. Her investment is worth $80,000 today. What is the effective rate (annual effective yield) of her investment?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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