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Chapter 2 section 2

# Chapter 2 section 2 - years 4 Jennifer invests 1000 in a...

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Chapter 2, Section 2 1. Yu invests 1000 at a nominal interest rate of 6% compounded monthly. At time T , Yu has 2000. Calculate T in years. 2. Nic invests 700 in an account earning an annual effective interest rate of i . After 8 years, Nic’s account has a value of 1,234. Calculate i . 3. Melvin invests 1000 in a bank account earning a constant annual effective interest rate. Using the Rule of 72, Melvin estimates that he will have 2000 in 10 years. How much will Melvin actually have in 10
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Unformatted text preview: years? 4. Jennifer invests 1000 in a fund earning an annual effective interest rate of 10%. She wants to know when she will have 4000. Her banker estimates the time using the Rule of 72 as X years. Jennifer calculates it exactly as Y years. X and Y are not necessarily integers. Calculate Y - X. Answers: 1. 11.5813 Years 2. 7.3438% 3. 2004.23 4. 0.1451 years...
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