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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Question
5000 invested at an APR of 3.1% for 25 years is
Expert Solution
Meaning
Annual Percentage Rate (APR) is annual rate of interest charged to borrower and paid to lender. To find of the amount receivable after 25 years, formula will be as follows:
Where,
P: the principal, amount invested
A: the new balance
t: the time
r: the rate, (in decimal form)
n: the number of times it is compounded.
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