Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 8. Compound InterestHow many years are required for P 1,000 to increase to P 2,000 if invested at 9% per year compounded continuously? annualsemiannual-quarterlybimonthly-➜m = 1m = 2m = 4m = 6mnF = P(1+1)mr = nominal interest ratem= number of compoundingperiuds per yearmnnF = PCI + ²= PCI+m Nominal Rate of Interestspecifies rate of interest and a number ofinterest periods in one year.where:i=annual31-1mi annualm=1m = 2i= rate of interest perinterest periodr = nominal interest ratem= number of compoundingperiods per year

Present value is the current value of future sum of money at the given interest rate for the…

Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 8. Compound Interest How many years are required for P 1,000 to increase to P 2,000 if invested at 9% per year compounded continuously?

Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 8. Compound Interest How many years are required for P 1,000 to increase to P 2,000 if invested at 9% per year compounded continuously?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution.

8. Compound Interest

How many years are required for P 1,000 to increase to P 2,000 if invested at 9% per year compounded continuously?

annual
semiannual-
quarterly
bimonthly
-
➜
m = 1
m = 2
m = 4
m = 6
mn
F = P(1+1)
m
r = nominal interest rate
m= number of compounding
periuds per year
mn
n
F = PCI + ²
= PCI+
m

Nominal Rate of Interest
specifies rate of interest and a number of
interest periods in one year.
where:
i=
annual
31-
1
mi annual
m=1
m = 2
i= rate of interest per
interest period
r = nominal interest rate
m= number of compounding
periods per year

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