I Declining investments In August 2013, E-TRADE Financial indexed fund was tumbling by 1.5% (per annum). Given that the interest is compounded monthly: a) Determine the associated exponential model for the value of a $5,000 deposit after t years. b) Assuming that this rate of return continued for 3 years, how much would a deposit of $5,000 in August 2013 be worth in August 2016? (Answer to the nearest dollar) c) How many months will it take before the initial investment drops by a tenth should the falling trend last much longer? (Answer to the nearest month)
I Declining investments In August 2013, E-TRADE Financial indexed fund was tumbling by 1.5% (per annum). Given that the interest is compounded monthly: a) Determine the associated exponential model for the value of a $5,000 deposit after t years. b) Assuming that this rate of return continued for 3 years, how much would a deposit of $5,000 in August 2013 be worth in August 2016? (Answer to the nearest dollar) c) How many months will it take before the initial investment drops by a tenth should the falling trend last much longer? (Answer to the nearest month)
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
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Declining investments
In August 2013, E-TRADE Financial indexed fund was tumbling by 1.5% (per
annum). Given that the interest is compounded monthly:
a) Determine the associated exponential model for the value of a $5,000
deposit after
t years.
b) Assuming that this rate of return continued for 3 years, how much would a
deposit of $5,000 in August 2013 be worth in August 2016? (Answer to the
nearest dollar)
c) How many months will it take before the initial investment drops by a
tenth should the falling trend last much longer? (Answer to the nearest
month)
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