You have $X to invest. A certain investment will double your money in Y years. If the interest rate remains constant, how much will your investment be worth in Z years? X= The value in Z years is: Y= Z= 3,500 $ 7 years 12 years The interest rate (to two decimals) for this investment is: Try Again Try Again (Don't use rounded interest rate for this calc.)

9 Suppose you invested $500 in a local credit union and: f(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded quarterly. • g(t) gives the future value of the investment in t years, if the APR is 2% and interest is compounded monthly. h(t) gives the future value of the investment in f years, if the APR is 2% and interest is compounded continuously. a. Write a function rule for f(t). For g(t). For h(t). Then describe how the rules are similar and how they are different. b. Based on your understanding of exponential growth, describe how the graphs of f(t), g(t), and h(t) are similar, and how they are different. c. On the same coordinate grid, use algebraic reasoning to sketch graphs of the three functions. .

Suppose you just bought an annuity with 10 annual payments of $16,500 at a discount rate of 13.75 percent per year. a. What is the value of the investment at the current interest rate of 13.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 8.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 18.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.

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.

Subject:- finance

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