Sue is 10 years old and would like to make a down payment on a vehicle when she is 16 years old. She currently has $2,000. What

Question

defon

2 years ago

6

Sue is 10 years old and would like to make a down payment on a vehicle when she is 16 years old. She currently has $2,000. What

rate of return must Sue receive for her investment to double by the time she is 16?

Business

1 answer:

Sonbull [250] · Answer 1 · 2022-08-29T08:29:55+03:00

Answer:

The rate of return must be 12.25% per year

Explanation:

Find the calculation attached. The aim is to increase the initial capital taking into acount that for each year the capital will be increased by the interest paid . Therefore the capital + interest paid will be the new balance from which the 12,25% will be applied again for the next 6 years.