IM SAVINGS BOND CAN BE BOUGHT FOR $50 TODAY AND EXCHANGED FOR $ 12 Yeas FEWTORESTS...

Question

Question

IM SAVINGS BOND CAN BE BOUGHT FOR $50 TODAY AND EXCHANGED FOR $ 12 Yeas FEWTORESTS COMPOMADEO CON TUOUSLY, a) WHAT IS THE nom

Answer 1

Answer #1

The interest rate is compounded continuously. So, the following formula can be used:

Where P.V. is the present value, t is the number of periods and F.V. is the future value.

Putting the values:

Now,

So, the interest rate is 5.946% (approximately).

Answer 2

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