Question
Asked Dec 27, 2019
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Suppose that $12,000 is invested in a bond fund and the account grows to $14,309.26 in 4 yr.   a. Use the model A = Pert to determine the average rate of return under continuous compounding. Round to the nearest tenth of a percent.  b. How long will it take the investment to reach $20,000 if the rate of return continues? Round to the nearest tenth of a year.

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Expert Answer

Step 1

(a) From the given information, it is observed that A = $14,309.26, P = $12,000 and t = 4.

Compute the average rate by using A = Pert.

Substitute A...

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