Answered: You invest $13,000 at 18% interest,…

Business

Accounting

You invest $13,000 at 18% interest, compounded monthly, for 2 year

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.

Question

You invest $13,000 at 18% interest, compounded monthly, for 2 year

Expert Solution

Step 1

Future value of investment under compound interest method:

$F u t u r e v a l u e = P \times {(1 + \frac{r}{f})}^{n \times f}$

Where,

P = Principle

r = rate of interest

f = frequency of payments in a year

t = number of years

Step by step

Solved in 2 steps

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