# Your are the finance manager for a company that just had a great year. Last year’s income statement and this year’s expectations indicate that the company has a surplus of cash. You decide to invest \$100,000 of this cash in a 5 year CD that compounds monthly. The total amount of the investment after the 5 years is given by:A(r)=100,000(1+ r/12)^60 . where r is the annual interest rate. Assuming that the interest rate is 3% (r = 0.03):1. What is the total amount of the investment after 5 years?2. How fast is the amount growing with respect to r, in dollars per percent?

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Your are the finance manager for a company that just had a great year. Last year’s income statement and this year’s expectations indicate that the company has a surplus of cash. You decide to invest \$100,000 of this cash in a 5 year CD that compounds monthly. The total amount of the investment after the 5 years is given by:

A(r)=100,000(1+ r/12)^60 .

where r is the annual interest rate. Assuming that the interest rate is 3% (r = 0.03):

1. What is the total amount of the investment after 5 years?
2. How fast is the amount growing with respect to r, in dollars per percent?

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Step 1

We have to find  total amount of the investment after 5 years,where A(r) is given by

Step 2

Part (1)-As formula for A(r) is giving  value of investment after 5 year so just put r=.03 to get final answer.

Work is shown below

Step 3

Rules of derivative i...

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