Question

The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations.

 If a security currently worth $9,200 will be worth $12,106.57 seven years in the future, what is the implied interest rate the investor will eam on the security-assuming that no additional deposits or withdrawals are made? 

7.60% 4.00% 3.20% 1.32% 

If an investment of $50,000 is earning an interest rate of 8.00%, compounded annually, then it will take _______ for this investment to reach a value of $62,985.60-assuming that no additional deposits or withdrawals are made during this time. 

Which of the following statements is true-assuming that no additional deposits or withdrawals are made? 

It takes 14.21 years for $500 to double if invested at an annual rate of 5%. 

It takes 10.50 years for $500 to double if invested at an annual rate of 5%.

Answer 1

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