Bobby irsh has an account with $1,000. It earns 7.4% compounded monthly. No money is added to his account except for ompounded interest. How long will it take his account to add $2,200 of value to the account?
Bobby irsh has an account with $1,000. It earns 7.4% compounded monthly. No money is added to his account except for ompounded interest. How long will it take his account to add $2,200 of value to the account?
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
Bobby irsh has an account with $1,000. It earns 7.4% compounded monthly. No money is added to his account except for ompounded interest. How long will it take his account to add $2,200 of value to the account?
Expert Solution
Step 1
The concept of time value of money will be used and applied.
To compute the future value we compound the present value of amount deposited or invested.
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