Question

At 5 percent interest, how long does it take to double your
money? **(Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)**

Length of time
years

At 5 percent interest, how long does it take to quadruple your
money? **(Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)**

Length of time
years

Answer #1

a.We use the formula:

A=P(1+r/100)^n

where

A=future value($2x)

P=present value($x say)

r=rate of interest

n=time period.

2x=x*(1.05)^n

2=(1.05)^n

Taking log on both sides;

log 2=n*log 1.05

n=log 2/log 1.05

which is equal to

=**14.21 years(Approx).**

b.We use the formula:

A=P(1+r/100)^n

where

A=future value($4x)

P=present value($x say)

r=rate of interest

n=time period.

4x=x*(1.05)^n

4=(1.05)^n

Taking log on both sides;

log 4=n*log 1.05

n=log 4/log 1.05

which is equal to

=**28.41 years(Approx).**

At 6.1 percent interest, how long does it take to double your
money? (Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.) Length of time years At
6.1 percent interest, how long does it take to quadruple it? (Do
not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.) Length of time years.

At 6.5% interest, how long does it take to double your
money?
(Do not round intermediate calculations. Round your answer to 2
decimal places.)
Length of time years At 6.5% interest, how long does it take to
quadruple it?
(Do not round intermediate calculations. Round your answer to 2
decimal places.) Length of time years

Problem 5-7 Calculating the Number of Periods [LO4]
At 7 percent interest, how long does it take to double your
money? (Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
At 7 percent interest, how long does it take to quadruple it?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)

How long does it take to double your money at 10 percent
interest? How long does it take to quadruple your money?
Present Value
Years
Interest Rate
Future Value
$ 1.00
10%
$2.00
$1.00
10%
$4.00

6. How long does it take to double your money at 10 percent
interest? How long does it take to quadruple your money?
Input area:
Output area:
Present value
Years
Interest rate
Future value
$
1.00
***?
10%
$
2.00
1.00
***?
10%
4.00

24
At a growth (interest) rate of 9 percent annually, how long will
it take for a sum to double? To triple? Use Appendix A for an
approximate answer, but calculate your final answer using the
formula and financial calculator methods. (Do not round
intermediate calculations. Round your final answers to 2 decimal
places.)

Cheap Money Bank offers your firm a discount interest
loan at 5 percent for up to $18 million and, in addition, requires
you to maintain a 2 percent compensating balance against the amount
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What is the effective annual interest rate on this lending
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enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)

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Difference ____________
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A firm offers terms of 1/10, net 35.
a. What effective annual interest rate does the firm earn when a
customer does not take the discount? (Do not round intermediate
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decimal places, e.g., 32.16.)
b. What effective annual interest rate does the firm earn if the
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A firm offers terms of 1.8/10, net 30.
a.
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Do not round intermediate calculations and enter your answer as a
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