Question
Asked Sep 24, 2019
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How long would it take an investment to double under each of the following conditions?
(a) Interest is 3.3% compounded monthly. (Enter your answer as a whole number of years and months.)
254
X years and 4
months
(b) Interest is 7% compounded continuously. (Round your answer to three decimal places.)
6.5
X years
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How long would it take an investment to double under each of the following conditions? (a) Interest is 3.3% compounded monthly. (Enter your answer as a whole number of years and months.) 254 X years and 4 months (b) Interest is 7% compounded continuously. (Round your answer to three decimal places.) 6.5 X years

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Expert Answer

Step 1

Part A and B:

Calculation of Duration of Investment:

a. The duration of investment is 21 years and 0.033 months.

b. The duration of investment is 9.902 years.

Excel Spreadsheet:

...
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B Part A 1 2 Present Value $100 $200 3 Future Value 4 Interest Rate 5 Number of Months 6 Number of Years 0.28% 252.400 21.033 7 Part B 9 Present Value 10 Future Value 11 Interest Rate $100 $200 7.25% 12 Number of Years 9.902

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