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Studentka2010 [4]
3 years ago
7

In 2029, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value i

n 2041. What annual rate of return will you earn over the last 12 years?
Business
1 answer:
stiv31 [10]3 years ago
4 0

Answer:

Present face value (PV) =$1,000

Future face value (FV) = $2,000

Number of years (n) = 12 years

Interest rate = ?

FV = PV(1 + r)n

$2,000 = $1,000(1 + r)12

<u>$2,000</u> = (1 + r)12  

$1,000

2 = (1 + r)12

12√2= 1 + r    

1.0595 = 1 + r

1.0595 - 1 = r

r = 0.0595

r = 5.95% = 6%                                                                          

Explanation:

In this case, we will apply the formula for future value of a lump sum, which equals present value multiplied by 1 plus interest rate raised to power number of years.  The future value, present value and number of years were provided with the exception of interest rate. Thus, interest rate is made the subject of the formula.

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Answer:

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Inflation targeting is a type of monetary policy where the central bank of a country sets an inflation rate as its goal or target.

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As the accountant for Marston Retail Stores, you must calculate the current ratio for the firm's last accounting period. The fir
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Answer:

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What is accountability
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5 0
1 year ago
Campbells is a newly established company that specializes in preparing healthy but tasty food for children under the age of 5. I
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