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How many years will it take for an initial investment of 25000 to grow to 80000 at a rate of interest of 7 percent compounded continously?
Wiki User
∙ 12y ago
"Continuously" is exactly how this question arrives on WikiAnswers. Someone has
distributed an exam or a homework assignment with a poorly written question on
it, and a lot of people are coming here to get the answer.
WikiAnswers is not here to answer exam or homework questions. But the best
response to this one isn't a numerical 'answer'. It's this:
There's no such thing as "compounded continously", even if the spelling were corrected.
The compounding interval must be specified, no matter how short it may be.
Popular compounding intervals include: Annually, semi-annually, quarterly,
monthly, weekly, or daily. Technically, it could even be hourly, or minutely, but
it has to be specified. Compounding is a discrete process, and can never
proceed "continuously".
Wiki User
∙ 12y ago
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The concepts of simple interest and compound interest and how these affected the results of your investment exercise?
Simple interest (compounded once) Initial amount(1+interest rate) Compound Interest Initial amount(1+interest rate/number of times compounding)^number of times compounding per yr
What is the future value of 500 invested for 15 years at 5 percent?
It depends how the interest is calculated. If it's compounded, your initial 500 investment would be worth 638.15 after 5 years.
How long does it take 1125 to triple if it is invested at 7 percent interest compounded quarterly?
(1 + .07/4)4x = 3 4x log(1+.07/4) = log(3) x = 0.25 log(3)/log(1.0175) = 15.83 The amount of the original investment doesn't matter. At 7% compounded quarterly, the value passes triple the original amount with the interest payment at the end of the 16th year.
How much will 6000 for 6 years at 8 and a half percent compounded daily will grow?
Continuous interest formula, A = Pe^(rt)....where A is the accumulated amount, P is the initial investment, r is the interest rate expressed as a decimal, and t is the time - usually in years. Then, A = 6000e^(0.085 x 6) = 6000e^0.51 = 9991.75 So the growth amount is, 9991.75 - 6000.00 = 3991.75
Approximately how long will it take for 1000 to grow to 5006 at 8 annual interest and compounded 12 times per year?
Use the equation $=$0*(1 + r)xn where $ is the amount of money, $0 is the initial amount of money, r is the rate, x is the number of times per year the interest is compounded, and n is the number of years the interest is compounded. We are solving for n. To do this we need to use logs. log(1 + r)($/$0)/x = n log1.08(5006/1000)/12 = n = 1.744 years.
A loan at 6 percent interest over 5 years What is the total output?
If the interest is simple interest, then the value at the end of 5 years is 1.3 times the initial investment. If the interest is compounded annually, then the value at the end of 5 years is 1.3382 times the initial investment. If the interest is compounded monthly, then the value at the end of 5 years is 1.3489 times the initial investment.
The concepts of simple interest and compound interest and how these affected the results of your investment exercise?
Simple interest (compounded once) Initial amount(1+interest rate) Compound Interest Initial amount(1+interest rate/number of times compounding)^number of times compounding per yr
What is the future value of 500 invested for 15 years at 5 percent?
It depends how the interest is calculated. If it's compounded, your initial 500 investment would be worth 638.15 after 5 years.
Why would two investments with the same annual rate may not be equal with respect to the interest they return?
We can think of two ways that could happen: 1). The initial investment amounts (the principles) may be different. 2). Interest on the two investments may be compounded at different intervals.
How long does it take 1125 to triple if it is invested at 7 percent interest compounded quarterly?
(1 + .07/4)4x = 3 4x log(1+.07/4) = log(3) x = 0.25 log(3)/log(1.0175) = 15.83 The amount of the original investment doesn't matter. At 7% compounded quarterly, the value passes triple the original amount with the interest payment at the end of the 16th year.
Who. Find the amount at the end and the interest made on an investment of 6 400 compounded at 8.5 per annum for 5 years?
The at 8.5%, the investment increases, every year, by a factor of 1 + 8.5/100, that is, by a factor of 1.085. The total amount of money you get at the end of five years, then, is 6400 x 1.085^5 (the "^" means "power"). If you subtract the initial capital from that, what remains is the interest earned.
Continuously compounded interest- solve for interest rate?
r=ln((A/P)^1/t) Where: A is the Final amount P is the Initial amount t is the time passed r is the interest rate
An initial 500 compounded for 1 year at 6 percent?
Interest earned is computed by taking the principal amount and multiplying it by the rate and time and divided by the time taken. The interest in this case is 30.
How do you solve interest compounded monthly?
fv = pv(1+r/12)^t Where: fv = future value pv = present (initial) value r = interest rate t = time period
What is the crowding out?
A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect
What if Jennifer deposited 10000 in an account that earns compound interest. The annual interest rate is 8 and the interest is compounded 2 times a year. The current balance in the account is 10?
No. If the account is earning interest the current amount should be greater than the initial deposit.
Are there any investment clubs open to new members?
There are many investment clubs open to new members. One in particular is HYIFUND.com, they start you off will a $2.50 initial investment and you earn interest daily.
