Your are the finance manager for a company that just had a great year. Last year’s income statement and this year’s expectations indicate that the company has a surplus of cash. You decide to invest $100,000 of this cash in a 5 year CD that compounds monthly. The total amount of the investment after the 5 years is given by: A(r)=100,000(1+ r/12)^60 . where r is the annual interest rate. Assuming that the interest rate is 3% (r = 0.03): 1. What is the total amount of the investment after 5 years?2. How fast is the amount growing with respect to r, in dollars per percent?
Your are the finance manager for a company that just had a great year. Last year’s income statement and this year’s expectations indicate that the company has a surplus of cash. You decide to invest $100,000 of this cash in a 5 year CD that compounds monthly. The total amount of the investment after the 5 years is given by: A(r)=100,000(1+ r/12)^60 . where r is the annual interest rate. Assuming that the interest rate is 3% (r = 0.03): 1. What is the total amount of the investment after 5 years?2. How fast is the amount growing with respect to r, in dollars per percent?
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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Your are the finance manager for a company that just had a great year. Last year’s income statement and this year’s expectations indicate that the company has a surplus of cash. You decide to invest $100,000 of this cash in a 5 year CD that compounds monthly. The total amount of the investment after the 5 years is given by:
A(r)=100,000(1+ r/12)^60 .
where r is the annual interest rate. Assuming that the interest rate is 3% (r = 0.03):
1. What is the total amount of the investment after 5 years?
2. How fast is the amount growing with respect to r, in dollars per percent?
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