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Concept explainers
The Rule of 72 This is a continuation of Exercise 14. Financial advisors sometimes use a rule of thumb known as Rule of 72 to get a rough estimate of the time it takes for an investment to double in value. For an investment that is compounded yearly at an interest rate of
For the remainder of this exercise, we will consider an investment that is compounded yearly at an interest rate of
a. According to the Rule 72, how long will it take the investment to double in value?
Parts b and c of this exercise will check to see how accurate this estimate is for this particular case.
b. Using the answer you got from part a of this exercise, calculate the future value interest factor (as defined in Exercise 14). Is it exactly the same as your answer to the part a of Exercise 14?
c. If your initial investment was
Future Value Business and finance texts refer to the value of an investment at a future time as its future value. If an investment of P dollars is compounded yearly at an interest rate of
In this formula,
Financial officers normally calculate this (or look it up in a table)
a. What future value interest factor will make an investment double?
b. Say you have an investment that is compounded yearly at a rate of
Find the future value interest factor for a 7-year investment.
c. Use the results from part b to calculate the 7-year future value if your initial investment is
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Chapter P Solutions
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
- Calculați (a-2023×b)²⁰²⁴arrow_forwardA student completed the problem below. Identify whether the student was correct or incorrect. Explain your reasoning. (identification 1 point; explanation 1 point) 4x 3x (x+7)(x+5)(x+7)(x-3) 4x (x-3) (x+7)(x+5) (x03) 3x (x+5) (x+7) (x-3)(x+5) 4x²-12x-3x²-15x (x+7) (x+5) (x-3) 2 × - 27x (x+7)(x+5) (x-3)arrow_forward2 Add the rational expressions below. Can you add them in this original form? Explain why or why not. 3x-7 5x + x² - 7x+12 4x-12 Show all steps. State your least common denominator and explain in words your process on how you determined your least common denominator. Be sure to state your claim, provide your evidence, and provide your reasoning before submitting.arrow_forward
- carol mailed a gift box to her sister the boxed gift weighed a total of 2 pounds the box alone weighed 13 ounces what was the wright of the giftarrow_forwardDirections: Use the table below to answer the following questions and show all work. Heights of Females 50.0 51.5 53.0 53.5 54.0 1. What is the average female height? 2. What are all the differences from the mean? 3. What is the variance for the female heights? 4. What is the standard deviation of the heights of the females? 5. What does the standard deviation found in number 4 represent? Write your answer in complete sentences.arrow_forward135 metr uzunlikdagi simni 6:3 nisbatda qismlarga am eatingarrow_forward
- MODELING REAL LIFE Your checking account has a constant balance of $500. Let the function $m$ represent the balance of your savings account after $t$ years. The table shows the total balance of the accounts over time. Year, $t$ Total balance 0 1 2 3 4 5 $2500 $2540 $2580.80 $2622.42 $2664.86 $2708.16 a. Write a function $B$ that represents the total balance after $t$ years. Round values to the nearest hundredth, if necessary. $B\left(t\right)=$ Question 2 b. Find $B\left(8\right)$ . About $ a Question 3 Interpret $B\left(8\right)$ . b represents the total balance checking and saving accounts after 8 years the balance would be 16 / 10000 Word Limit16 words written of 10000 allowed Question 4 c. Compare the savings account to the account, You deposit $9000 in a savings account that earns 3.6% annual interest compounded monthly. A = 11998.70 SINCE 9000 is the principal ( 1+0.036/12)12 times 8 gives me aproxtimately 1997 14 / 10000 Word Limit14 words written of 10000 allowed Skip to…arrow_forwardListen MODELING REAL LIFE Your checking account has a constant balance of $500. Let the function m represent the balance of your savings account after t years. The table shows the total balance of the accounts over time. Year, t Total balance 0 $2500 1 $2540 2 $2580.80 3 $2622.42 4 $2664.86 5 $2708.16 a. Write a function B that represents the total balance after t years. Round values to the nearest hundredth, if necessary. B(t) = 500 + 2000(1.02)* b. Find B(8). About $2843.32 Interpret B(8). B I U E T² T₂ c. Compare the savings account to the account, You deposit $9000 in a savings account that earns 3.6% annual interest compounded monthly. B I U E E T² T₂ A = 11998.70 SINCE 9000 is the principal (1+0.036/12)12 times 8 gives me aproxtimately 1997arrow_forwardWhat are the answers for star powerarrow_forward
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