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LenaWriter [7]
2 years ago
6

A bank account is growing with continuous compounding at a fixed annual interest rate. the balance of the bank account doubles i

n 6 years. which formula could be used to find the interest rate?
Business
1 answer:
zubka84 [21]2 years ago
7 0

The formula that can be used to find interest rate is Interest rate = (In 2) / 6.

<h3>What is the formula that can be used to determine the interest rate?</h3>

When a bank account is growing with continuous compounding, it means that both the interest accrued and the amount deposited increases continually over a specified period of time.

When the investment doubles, it means that if the future value of the investment is divided by the present value of the investment, the value would be two.

Interest rate = (In FV / PV) / number of years it would take the investment to double

Where:

  • FV = future value
  • PV = present value
  • FV / PV = 2

Interest rate = (In 2) / 6

To learn more about continuous compounding, please check: brainly.com/question/26476328

#SPJ1

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Top earning game of USA​
padilas [110]

Answer:

Clash of Clans by Supercell

Explanation:

According to Góogle Play ranking as of April 2021, the top-earning game of the USA​ is Clash of Clans by Supercell.

This game is available on the Andriod operating system. and it has been in existence since 2012. It currently has close to a billion downloads across platform different website platforms.

3 0
3 years ago
A stock price is currently $40. It is known that at the end of one month it will be either $42 or $38. The risk-free interest ra
mr_godi [17]

Answer:

$1.70

Explanation:

Given that,

Current stock price= $40

Strike price= $39

After a period of one month, two states will be achievable.

- First state

Stock price=$42

Option value= 42-39

=$3

- Second state

Stock price= $38

Option value= 0

Upmove size of first state is

U= 42/40 =1.05

Downmove size of the second state is

D=38/40=0.95

The values given for the upside probability is given as:

Rf= 0.08

t= 1/12

πu = 0.567

The downside probability is equal to:

= 1 - 0.567

= 0.433

Therefore, the present value of option is:

(0.567 × 3) + (0.43 × 0) / e^0.08 × 1/12

= 1.70

Thus, the value of a one-month European call option is $1.70

8 0
4 years ago
Bill and Mary sign a contract whereby Bill is going to deliver 400 pairs of shoes to Mary's warehouse by noon on Tuesday. The co
MariettaO [177]

Answer:

Bill shall win the case, even when he has a fault but that is not relevant.

Explanation:

In case Mary do not want the pair of shoes then she shall reject the pair, and pay the liability as stated in the contract, in case of fault by the party in the contract.

As she has many metal pallets also the fact that Bill delivers the shoes along with metal pallets and not with wooden pallets, is not a major default for the grounds to be sued by Mary.

As this clearly do not make any fault in the quality of shoes delivered, time of shoes delivered etc:

Thus, Bill shall win the case.

8 0
3 years ago
Suppose that the risk-free interest rate is 10% per annum with continuous compounding and that the dividend yield on a stock ind
Tasya [4]

Answer:

See Below

Explanation:

We can use the future price formula here, which is:

F=Pe^{(r_f-d_y)*\frac{n}{12}}

Where

F is the theoretical future price

P is the present index standing

r_f is the risk free rate

d_y is the dividend yield

n is the number of months of the futures deliverable

Now,

given

P = 395

r_f = 0.1

d_y = 0.03

n = 3

Substituting, we get:

F=Pe^{(r_f-d_y)*\frac{n}{12}}\\F=(395)e^{(0.1-0.03)*\frac{3}{12}}\\F=(395)e^{0.0175}\\F=401.97

Actual future price is 404. The index future price is higher. So the strategy would be to sell the futures contracts. Long the shares underlying the index.

4 0
3 years ago
Douglas owns rental property that he bought several years ago for $250,000. He has taken depreciation on the house in the amount
Ket [755]

Answer:

Gain= $63,000

Explanation:

<u>First, we need to calculate the book value:</u>

<u></u>

Book value= purchase price - accumulated depreciation

Book value= 250,000 - 35,000

Book value= 215,000

<u>Now, the gain or loss from the sale:</u>

Gain/loss= selling price - book value - selling expense

Gain/loss= 290,000 - 215,000 - 12,000

Gain= $63,000

7 0
3 years ago
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