A bond is worth $250 and grows in value by 6.5% each year. How long until the bond triples in value? Round to the nearest whole year!



B) A bond is worth $250 and grows in value by 6.5% each year. How long until the bond doubles in value? Round to the nearest whole year!



C) A bond is worth $250 and grows in value by 6.5% each year. How long until the bond is worth $2000? Round to the nearest whole year!



D) A bond is worth $250 and grows in value by 6.5% each year. How long until the bond is worth $2500? Round to the nearest whole year!



E) You have $2000 in your savings account and it grows in value by 7.5%...how long until you have $5000? Round to the nearest whole year.

Respuesta :

The answers for A, B, C, D and E are:

17years, 11 years, 33 years, 37 years and 13 years respectively

What is a bond?

A bond is a loan by an investor to a company or government which yields reasonable interest after a period of time.

Bonds can be surety bond, savings bond or security bond.

Analysis:

A)  face value of bond after T years is 3 x 250 = 750

     present value of bond = 250

    formula for calculating bond = F = P[tex](1+r)^{T}[/tex]

where, F = face value, P = present value, r = percentage yield , T = time taken
750 = [tex]250(1+0.065)^{T}[/tex]

T log(1.065) = log 3

T = 17 years

B) F = 500, P = 250

    500 =  250(1+0.065)^{T}

   Tlog(1.065) = log2

T = 11 years

C) F = 2000, P = 250

   2000 =  250(1+0.065)^{T}

Tlog(1.065) = log 8

T = 33 years

D) F = 2500, P = 250

    2500 = 250(1+0.065)^{T}

   Tlog(1.0650 = log 10

     T = 37 years

E) F = 5000, P = 2000, r = 7.5

    5000 = 2000(1+0.075)^{T}

     Tlog(1.075) = log 2.5

      T  = 13 years

In conclusion, The answers for the questions are 17years, 11 years, 33 years, 37 years and 13 years respectively

Learn more about bonds: brainly.com/question/25596583

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