Asked Oct 29, 2019

If an investor wanted to grow a continuously compounded investment of $1000 to $1250 in 3 years, what interest rate must the investor receive? Round to the nearest tenth.


Expert Answer

Step 1

Computation of rate of interest:


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A Pe(rt) $1,250 S1,000 (3r) 1,250 In = 3r 1,000 3r 0.2231 r = 7.4%


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