Question

Question 7 0.2 pts This is an extra credit review problem. It is not required. Assume you have $3,714 to invest today in an account paying 3% compounded annually. How many years will it take before you have $14,611 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 $834,563 at the end of the first year. Your marketing team believes sales will continue to increase by 6% each year. If you deposit your profits into a bank account that pays 6% each year compounded annually, how much will you have in your account in 6 years? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas ("") or a decimal point (":").

Answer 1

7.

P = 3714, i = 3%, F = 14611

F = P * (1+i)^t

14611 = 3714 *(1+0.03)^t

(1.03)^t = 14611 / 3714 = 3.934033

Taking log both sides

t = log 3.934033 / log 1.03

t = 46.34 yrs ~ 47 yrs (in 46 yrs the required amount will not be in the acoount)

8

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

= 834563 * 6 / (1+0.06)

= 4723941.51

= 4723942 (Nearest Dollar)