Question

Question ? How many years will take for an investment of 57.500 to grow to $2.000 is invested w a lly? At what rate of interest mest you savings of $10,000 he compounded annually for it to grow to 52.000 in years? 12.5-25-5 marks) a lot of 100AED on 5 years. The interest rate is 2% compounded Construct an amortization schedule for the loan repayment (5 Marks) al

Answer 1

Answer:

2. i.

A=$23,000, P= $7,500, i=8%, t=?

We know, A = P(1 + r) ^t

Or, 23000=7500(1+0.08)^t

Or,1.08^t = 23000/7500

taking ln both sides,

t ln 1.08 = ln (23000/7500)

or, t= ln (23000/7500)/ln 1.08

or, t = 1.1206/0.0770 = 14.56

or around 14 and 1/2 years.

2.ii.

A=$22,000, P= $10,000, t=8, i= ?

We know, A = P(1 + r) ^t

Here 22000= 10000(1+r)^8

or, (1+r)^8 = 2.2

taking ln of both sides,

8 ln (1+r) = ln 2.2

or ln (1+r) = 0.125 ln 2.2

or 1+r = e^0.125 ln 2.2

or, r= e^0.0986-1 = 0.1036

or 10.36%