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Use Table 11-2 to solve the problem. Stuart Daniels estimates that he will need $22,000 to set up a small business in 7 years. (a) How much (in $) must Stuart invest now at 8% interest compounded quarterly to achieve his goal? $ (b) How much compound interest (in $) will he earn on the investment? $

Use Table 11-2 to solve the problem. Stuart Daniels estimates that he will need $22,000 to set up a small business in 7 years. (a) How much (in $) must Stuart invest now at 8% interest compounded quarterly to achieve his goal? $ (b) How much compound interest (in $) will he earn on the investment? $

Essentials Of Investments
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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The values in Table 11-2 were generated by the formula PV=(1 + i)(~) rounded to five decimal places, where i is the interest rate per period and n is the total number of periods. periods 0.5% 1% 1.5% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 10.99502 0.99010 0.98522 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 0.86957 0.86207 0.85470 0.84746 20.99007 0.98030 0.97066 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 0.75614 0.74316 0.73051 0.71818 30.98515 0.97059 0.95632 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.69305 0.67497 0.65752 0.64066 0.62437 0.60863 40.98025 0.96098 0.94218 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.57175 0.55229 0.53365 0.51579 50.97537 0.95147 0.92826 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.54276 0.51937 0.49718 0.47611 0.45611 0.43711 60.97052 0.94205 0.91454 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 0.43233 0.41044 0.38984 0.37043 70.96569 0.93272 0.90103 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 0.37594 0.35383 0.33320 0.31393 80.96089 0.92348 0.88771 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.37616 0.35056 0.32690 0.30503 0.28478 0.26604 9|0.95610 0.91434 0.87459 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 0.28426 0.26295 0.24340 0.22546 10 0.95135 0.90529 0.86167 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 0.24718 0.22668 0.20804 0.19106 11 0.94661 0.89632 0.84893 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 0.21494 0.19542 0.17781 0.16192 12 0.94191 0.88745 0.83639 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 0.18691 0.16846 0.15197 0.13722 13 0.93722 0.87866 0.82403 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.20416 0.18207 0.16253 0.14523 0.12989 0.11629 14 0.93256 0.86996 0.81185 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 0.14133 0.12520 0.11102 0.09855 15 0.92792 0.86135 0.79985 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.15989 0.14010 0.12289 0.10793 0.09489 0.08352 16|0.92330 0.85282 0.78803 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 0.10686 0.09304 0.08110 0.07078 17 0.91871 0.84438 0.77639 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 0.09293 0.08021 0.06932 0.05998 18 0.91414 0.83602 0.76491 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 0.08081 0.06914 0.05925 0.05083 19 0.90959 0.82774 0.75361 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 0.07027 0.05961 0.05064 0.04308 20 0.90506 0.81954 0.74247 0.67297 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 0.06110 0.05139 0.04328 0.03651 21 0.90056 0.81143 0.73150 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 0.05313 0.04430 0.03699 0.03094 22 0.89608 0.80340 0.72069 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 0.04620 0.03819 0.03162 0.02622 23 0.89162 0.79544 0.71004 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 0.04017 0.03292 0.02702 0.02222 24 0.88719 0.78757 0.69954 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 0.03493 0.02838 0.02310 0.01883 25 0.88277 0.77977 0.68921 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 0.03038 0.02447 0.01974 0.01596
Transcribed Image Text:The values in Table 11-2 were generated by the formula PV=(1 + i)(~) rounded to five decimal places, where i is the interest rate per period and n is the total number of periods. periods 0.5% 1% 1.5% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 10.99502 0.99010 0.98522 0.98039 0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 0.86957 0.86207 0.85470 0.84746 20.99007 0.98030 0.97066 0.96117 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 0.75614 0.74316 0.73051 0.71818 30.98515 0.97059 0.95632 0.94232 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.69305 0.67497 0.65752 0.64066 0.62437 0.60863 40.98025 0.96098 0.94218 0.92385 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.57175 0.55229 0.53365 0.51579 50.97537 0.95147 0.92826 0.90573 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.54276 0.51937 0.49718 0.47611 0.45611 0.43711 60.97052 0.94205 0.91454 0.88797 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 0.43233 0.41044 0.38984 0.37043 70.96569 0.93272 0.90103 0.87056 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 0.37594 0.35383 0.33320 0.31393 80.96089 0.92348 0.88771 0.85349 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.37616 0.35056 0.32690 0.30503 0.28478 0.26604 9|0.95610 0.91434 0.87459 0.83676 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 0.28426 0.26295 0.24340 0.22546 10 0.95135 0.90529 0.86167 0.82035 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 0.24718 0.22668 0.20804 0.19106 11 0.94661 0.89632 0.84893 0.80426 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 0.21494 0.19542 0.17781 0.16192 12 0.94191 0.88745 0.83639 0.78849 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 0.18691 0.16846 0.15197 0.13722 13 0.93722 0.87866 0.82403 0.77303 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.20416 0.18207 0.16253 0.14523 0.12989 0.11629 14 0.93256 0.86996 0.81185 0.75788 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 0.14133 0.12520 0.11102 0.09855 15 0.92792 0.86135 0.79985 0.74301 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.15989 0.14010 0.12289 0.10793 0.09489 0.08352 16|0.92330 0.85282 0.78803 0.72845 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 0.10686 0.09304 0.08110 0.07078 17 0.91871 0.84438 0.77639 0.71416 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 0.09293 0.08021 0.06932 0.05998 18 0.91414 0.83602 0.76491 0.70016 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 0.08081 0.06914 0.05925 0.05083 19 0.90959 0.82774 0.75361 0.68643 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 0.07027 0.05961 0.05064 0.04308 20 0.90506 0.81954 0.74247 0.67297 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 0.06110 0.05139 0.04328 0.03651 21 0.90056 0.81143 0.73150 0.65978 0.53755 0.43883 0.35894 0.29416 0.24151 0.19866 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 0.05313 0.04430 0.03699 0.03094 22 0.89608 0.80340 0.72069 0.64684 0.52189 0.42196 0.34185 0.27751 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 0.04620 0.03819 0.03162 0.02622 23 0.89162 0.79544 0.71004 0.63416 0.50669 0.40573 0.32557 0.26180 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 0.04017 0.03292 0.02702 0.02222 24 0.88719 0.78757 0.69954 0.62172 0.49193 0.39012 0.31007 0.24698 0.19715 0.15770 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 0.03493 0.02838 0.02310 0.01883 25 0.88277 0.77977 0.68921 0.60953 0.47761 0.37512 0.29530 0.23300 0.18425 0.14602 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 0.03038 0.02447 0.01974 0.01596
Use Table 11-2 to solve the problem. Stuart Daniels estimates that he will need $22,000 to set up a small business in 7 years. (a) How much (in $) must Stuart invest now at 8% interest compounded quarterly to achieve his goal? $ (b) How much compound interest (in $) will he earn on the investment? $
Transcribed Image Text:Use Table 11-2 to solve the problem. Stuart Daniels estimates that he will need $22,000 to set up a small business in 7 years. (a) How much (in $) must Stuart invest now at 8% interest compounded quarterly to achieve his goal? $ (b) How much compound interest (in $) will he earn on the investment? $
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Stuart daniels estimates that he will need $22,000 to set up  small business in 8 years.

a) how much ( in $) must stuart invest now at 8% interest compound quartely  to achieve his goal ?

b) how much compound interest ( in $) will he earn on the investment.

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