You have an investment account that started with $3,000 10 years ago and which now has grow a. What annual rate of return have you earned (you have made no additional contributions to the b. If the cavings bond carns 16% per year from now on what will the account's value bo 10 year
You have an investment account that started with $3,000 10 years ago and which now has grow a. What annual rate of return have you earned (you have made no additional contributions to the b. If the cavings bond carns 16% per year from now on what will the account's value bo 10 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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Transcribed Image Text:You have an investment account that started with $3,000 10 years ago and which now has grown to $8,000.
a. What annual rate of return have you earned (you have made no additional contributions to the account)?
b. If the savings bond earns 16% per year from now on, what will the account's value be 10 years from now?
Expert Solution
Step 1
The future value of the investment depends on the interest rate and time period and it includes the amount of interest accumulated over the time.
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