(1 point) What nominal rate compounded continuously will increase your investment b.25% over 8 years? Answer:

Question

Question

business finance

Answer 1

Answer #1

Answer:

FV = P * e ^rt (P = Principal, r = Rate of Interest and t = Time period)

Let us assume initial investment = 1

Hence:

FV = 1 * (1 + 25%) = 1.25

Hence:

1.25 = e ^{r * 8}

since e = 2.718281828459

=>8r = 0.223

=> r = 0.223 / 8 =2.79%

2.79 %

Answer 2

Similar Homework Help Questions

What effective interest rate per year, compounded continuously, is equivalent to a nominal rate of 15%...

What effective interest rate per year, compounded continuously, is equivalent to a nominal rate of 15% per year? Express your answer as a %.
An initial investment of $3,000 earns 8% interest compounded continuously. What will the investment be worth...

An initial investment of $3,000 earns 8% interest compounded continuously. What will the investment be worth in 16 years? (Round your answer to the nearest cent.) $ Need Help? Read Watch It Talk to a Tutor
Consider an investment where $49,000 is invested for 15 years at 8% compounded continuously. How much...

Consider an investment where $49,000 is invested for 15 years at 8% compounded continuously. How much will this investment be worth after 15 years? (Round your answer to the nearest cent.) What is the total amount earned in compound interest? (Round your answer to the nearest cent.)

8? 8. An interest rate of 10% per year compounded continuously is the same as: C...

8? 8. An interest rate of 10% per year compounded continuously is the same as: C D a. Effective 12.683% per year compounded continuously. b. Effective 1.08% per month compounded continuously. c. Nominal 1% per month compounded continuously. d. Effective 10.517% per year compounded continuously. C
What nominal interest rate compounded continuously is equivalent to j52 = 14%?

What nominal interest rate compounded continuously is equivalent to j52 = 14%?
What nominal interest rate compounded continuously is equivalent to j52 = 14%?

What nominal interest rate compounded continuously is equivalent to j52 = 14%?

How many years are required for an investment to double in value if it is appreciating at the rat...

A. B. How many years are required for an investment to double in value if it is appreciating at the rate of 8% compounded continuously? At 8% compounded continuously, the investment doubles in (Round to one decimal place as needed.) years. At what nominal rate compounded continuously must money be invested to double in 6 years? A rate of | % is required for money to double in 6 years. (Do not round until the final answer. Then round to...
Question 8 (1 point) Your investments grew from $1,000 to 1,700 in 6 years. What nominal...

Question 8 (1 point) Your investments grew from $1,000 to 1,700 in 6 years. What nominal annual interest rate compounded semi annually did you earn? (j2=?) Your Answer:
If an IRA is a variable-rate investment for 25 years at rate r percent per year, compounded month...

If an IRA is a variable-rate investment for 25 years at rate r percent per year, compounded monthly, then the future value S that accumulates from an initial investment of $1000 is s = 100011 + 0.01r]300 12 What is the rate of change of S with respect to r and what does it tell us if the interest rate is as follows? (Round your answers to two decimal places.) (a) 6% If we were to increase the rate by...

Please answer C and D. If a nominal interest rate of 8% is compounded continuously, determine...

Please answer C and D. If a nominal interest rate of 8% is compounded continuously, determine the unknown quantity in each of the following situations: a. What uniform EOY amount for 9 years is equivalent to $7,000 at EOY 9? b. What is the present equivalent value of $900 per year for 12 years? c. What is the future equivalent at the end of the fifth year of $237 payments made every six months during the five years? The first...