Question

can you check number one and help with 2?

Use the following information to answer the next two questions: Harold needs to grow the $4,820 he currently has to $19,280 in seven years. He has found an investment that offers quarterly compounding and an effective annual rate (EAR) of 18%. Question 23 5 pts What is the periodic interest rate? (Remember a periodic interest rate is defined as: APR) HTML Editor BIVA, A IX ET33 X X5 E , DO VE V 14pt Paragraph APR/M= =18%/4=.045 =4.5% 6 words Question 24 5 pts How long will it take to achieve the desired future value amount if this investment is made? Will he reach his goal in time at the specified interest rate? HTML Editora 1 E BIVA, A - IX E E, DO N V 1 1 X X 14pt V - Paragraph -

Answer 1

Calculate the number of years required as follows: =NPER(18%/4,-4820,,19280) Function Arguments NPER - 0.045 Rate 18%/4 Pmt 4820 = 4820 Pv number - 19280 Fv 19280 I Type 1 = number = 3.760248753 Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate. Fv is the future value, or a cash balance you want to attain after the last payment is made. If omitted, zero is used. Formula result = 3.760248753 OK Cancel Help on this function Number of periods is 3.76. Number of years is 3.76*4 15.04 Years He cannot reach his goal in seven years at the given interest rate. Reason is, it takes 15.04 years to grow