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anonymous

  • one year ago

Hi, I really need help to solve this question - I don't understand it. I need to solve it by hand and not a calculator or spreadsheet. Thanks! Determine an interest rate less than 15%, a period of investment greater than two years, and a regular payment that will result in the total amount of interest you earn being equal to the total amount of money you put in? (for example, under what conditions will you have a future value of $1 000 000, having earned $500 000 interest?)

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  1. is3535
    • one year ago
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    Want [(1+r)^n - 1] / r = 2 where r < 15% and n > 2 years. Rule of 72 works. Try 8% and 9 years.

  2. anonymous
    • one year ago
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    I don't understand may you explain? Thanks I appreciate you helping me

  3. is3535
    • one year ago
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    (1+r)^t = 2 or t*ln(1+r) = ln 2. or t = ln(2)/ln(1+r) Now just start plugging in values of r and you will get some value of t. Then graph them.

  4. anonymous
    • one year ago
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    I saw those answers on yahoo answers but got confused hence i am here lol but thanks

  5. anonymous
    • one year ago
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    woops I got it sorry I was half alseep!

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