Suppose that $18,000 is invested in a bond fund and the account grows to $23,344.74 in 5 yr. a. Use the model A = Pe" to determine the average rate of returm under continuous compounding. Round to the nearest tenth of a percent. b. How long will it take the investment to reach $30,000 if the rate of return continues? Round to the nearest tenth of a year.
Suppose that $18,000 is invested in a bond fund and the account grows to $23,344.74 in 5 yr. a. Use the model A = Pe" to determine the average rate of returm under continuous compounding. Round to the nearest tenth of a percent. b. How long will it take the investment to reach $30,000 if the rate of return continues? Round to the nearest tenth of a 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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