a. Miss Sara decides to invest some of her money in an account gaining 6% interest compounded continuously. She ultimately would like to purchase a $12000 car. How much would she have to invest initially to have the necessary money in 4 years? Round your answer to the nearest whole dollar. Note: For continuous compounding you can use the formula: A = Pe"t b. Miss Sara realizes she only has $7000 to invest, which is less than she would need as discovered in part a. If she invests all $7000 in the same account described above, how long would it take for her to reach the $12000 she needs? Round to the nearest whole year.
a. Miss Sara decides to invest some of her money in an account gaining 6% interest compounded continuously. She ultimately would like to purchase a $12000 car. How much would she have to invest initially to have the necessary money in 4 years? Round your answer to the nearest whole dollar. Note: For continuous compounding you can use the formula: A = Pe"t b. Miss Sara realizes she only has $7000 to invest, which is less than she would need as discovered in part a. If she invests all $7000 in the same account described above, how long would it take for her to reach the $12000 she needs? Round to the nearest whole year.
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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Problem 1.
Transcribed Image Text:а.
Miss Sara decides to invest some of her money in an account gaining 6% interest
compounded continuously. She ultimately would like to purchase a $12000 car. How much would she
have to invest initially to have the necessary money in 4 years? Round your answer to the nearest
whole dollar.
Note: For continuous compounding you can use the formula: A = Pert
b.
Miss Sara realizes she only has $7000 to invest, which is less than she would need as
discovered in part a. If she invests all $7000 in the same account described above, how long would it
take for her to reach the $12000 she needs? Round to the nearest whole year.
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