Answered: What annual interest rate would the…

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What annual interest rate would the investment have to yield to double in 5 years?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter2: Using Financial Statements And Budgets

Section: Chapter Questions

Problem 6FPE

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Concept explainers

Motor Vehicle Insurance

Motor vehicle insurance is a contract between the insurance company that provides insurance cover and the person who owns the vehicle. According to the terms and conditions of the insurance contract, the insurance company reimburses the policyholder for losses and damages. This insurance policy covers the financial risks of the motor vehicle owner. Electronic vehicles are also covered in a vehicle insurance policy, but the insurance rate is relatively higher than other motor vehicle insurance. Motor vehicle insurance is otherwise called an automotive insurance policy.

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Mr. Miller has $2,500 to invest. His brother wants him to invest in an opportunity that could double his money in 5 yrs. What annual interest rate would the investment have to yield to double in 5 years?

(solve this with algebra round intermediate calculations to 4 decimal places, & round final answer to 2 decimal places)

Expected rate of return____ %

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