Question

Question 7 0.2 pts This is an extra credit review problem. It is not required. Assume you have $4,642 to invest today in an account paying 4% compounded annually. How many years will it take before you have $14,975 in your account? Enter your answer as: 12 Round your answer. Do not use a decimal point or any units. Question 8 0.25 pts This is an extra credit review problem. It is not required. You developed a new product that had a profit of $800,840 at the end of the first year. Your marketing team believes sales will continue to increase by 3% each year. If you deposit your profits into a bank account that pays 3% each year compounded annually, how much will you have in your account in 8 years? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas ("") or a decimal point("").

Answer 1

7.

F = P *(1+i)^t

14975 = 4642 * (1+0.04)^n

(1.04)^n = 14975 / 4642 = 3.225980

taking log both sides

n = log 3.225980 / log 1.04 = 29.86 yrs ~ 30 yrs

8.

Present value of geometric series when I is equal to g is C*n/(1+i)

P = 800840 * 8 / (1+0.03) = 6220116.505

Future worth = 6220116.505 * (1+0.03)^8 = 6220116.505 * (1.03)^8 = 7879457.49

= 7879457 (Nearest Dollar)