, MIN DTAP Assignment 05-Time Value of Money Back to Assignment Attempts Average

Question

, MIN DTAP Assignment 05-Time Value of Money Back to Assignment Attempts Average: 13 4. Finding the interest rate and the number of years AaAa 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. it a security currently worth $2,000 will be worth $2,809.86 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are madei 1.41% 0.47% 12.00% 7.12% If an investment of $50,000 is earning an interest rate of 4 .00%. compounded annualy, then it will take for this investment to reach a value of $71,165.59-assuming that no additional deposits or withdrawa's are made during this time. Which of the following statements is true-assuming that no additional deposits or withdrawals are made? O it takes 10.50 years for $500 to double if invested at an annual rate of 5% O tt takes 14.21 years for SS00 to doble invested at an annual rate of 5%, 2 4 6 tab

Explanation / Answer

As per chegg guidelines when ther are more than one question then we hae to aswer first question. Calculation of implied interest rate: Future value= Present value*(1+rate)^time 2809.86= 2000*(1+rate)^3 (1+rate)^3= 1.40493 (1+rate)= (1.40493)^1/3 1+rate= 1.12 rate= 0.12 So correct answer is 12%

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