Suppose that P dollars in principal is invested in anaccount earning 2.1% interest compoundedcontinuously. At the end of 2 yr, the amount in theaccount has earmed $193.03 in interest.a. Find the original principal. Round to the nearestdollar. (Hint: Use the model A = Pe" and substituteP + 193.03 for A.)b. Using the original principal from part (a) and the modelA = Pe", determine the time required for the investmentto reach $6000. Round to the nearest tenth of a year.

A=P+193.03 r- 0.021 t=2 years Since A=Pert Therefore, P+193.03= Pe 0.21*2 P+193.03/P= e0.042…

Answered: Suppose that P dollars in principal is…

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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If EBIT=6,000; interest expense=500, t=30%, and Ks=10%, then the value of S is equal to: a) 60,000 b) 55,000 c) 38,500 d) 48,500
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