Question

The final amount for $5000 invested for 25 years at 10% annual interest compounded semiannually is $57, 337.?
a. What is the effect of doubling the amount invested?

b. What is the effect of doubling the annual interest rate?

c. What is the effect of doubling the investment period?

Answer 1

a= the more money you put in the more you get out.
b. if you double the interest rate then you get more money in less time
c im not sure

Answer 2

All four are easily calculated. Go ahead and do it.

Answer 3

I get the first one because you just double 57,337 which equals 114,674 but how do you do the rest ?

Answer 4

\(5000(1 + 0.10/2)^{25*2} = 57337\)

a. What is the effect of doubling the amount invested?
\(10000(1 + 0.10/2)^{25*2}\)

b. What is the effect of doubling the annual interest rate?
\(5000(1 + 0.20/2)^{25*2}\)

c. What is the effect of doubling the investment period?
\(5000(1 + 0.10/2)^{50*2}\)

Let's double the frequency of the compounding period, while we're at it.
\(5000(1 + 0.10/4)^{25*4}\)

Answer 5

THANK YOU!