1. $30,000 is invested at a compounded yearly interest rate of 6%, with the interest compoundedconstantly.(a) How long do you think it will take for the value of this original investment to double?(b) How long do you think it will take for this initial investment to quadruple in value?(c) How long do you think it will take for this initial investment to double in value? (d)Is there a pattern here?(d) Can you spot the pattern? How long will it take to achieve five times the starting sum? What ifyou get seven times the amount you started with? etc.

Since you have asked a question with multiple sub parts, we will solve the first 3 parts for you as…

Answered: 1. $30,000 is invested at a compounded…

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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Similar questions

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?
How long does it take for an investment to double in value if it is invested at 5% compounded continuously? ... At 5% compounded continuously, the investment doubles in about years. (Round to two decimal places as needed.)
How many years will it take for an investment to double itself if the interest rate is 10%?
6.A young person with no initial capital invests k dollars per year at an annual rate of return r. Assume that investments are made continuously and that the return is compounded continuously. a.Determine the sum S(t) accumulated at any time t.
If an investment of $2,000 grew to $2,520 in three periods, what is the interest rate at which the investment grew? Solve using both present and future value tables.
Suppose in the year 2004 you invested $ 1000.- at an interest rate ? which is such that your capital doubles every 6 years (interest is compounded annually). That interest rate is percent. During the period 2004-2010 your money will grow by a factor . = During the period 2005-2011 your money will grow by a factor = . During the period 2007-2019 your money will grow by a factor . = During the period 2017-2035 your money will grow by a factor . = During the period 2010-2025 your money will grow by a factor . = When you retire in 50 years your investment will have grown to $ =
payoff method? 5 In Problem 4, you investigated the length of time for an investment to double in value when interest is compounded annually. The Rule of 72 is a rule of thumb, often used by bankers and investors, that gives an easy way to estimate the doubling time of an exponentially growing quantity like an investment with a fixed annual rate that is compounded annually. If r% is the fixed annual growth rate of a quantity, the Rule of 72 tells that: you doubling time= ●●● Annual Interest Rate (percent) Predicted Doubling Time (in years) Actual Doubling Time (in years) 1 72 r a. Test the Rule of 72 by completing a copy of the table below for a $1,000 investment that grows at the indicated fixed rates compounded annually. Then check your estimates using the appropriate exponential model and base-10 logarithms for the first three estimates. Use NOW-NEXT reasoning to check the last three estimates. Rule of 72 Predicted Doubling Times ▸ 2 35 6 8 9 10 12 b. Current annual interest rates…
The force of interest is known to be δ(t)=k√t where t is in years. a) Determine k such that money invested at t=0 will triple in 9 years.b) How long will it take for money invested at t=1 to triple?c) Find the equivalent constant rate convertible semi-annually that will cause money to triple in the first 9 years.

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