Math question Help Needed

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

A firm stock price is $25 per share and is expected to grow at a 5% compound annual rate. What should the stock price per share be in 5 years?

Jun 10th, 2015

Thank you for the opportunity to help you with your question!

calculate the compounded figure after 5 years.

Principal equivalent is $25 and rate is 5% annually

The final value should be

A=P(1+ r/n) ^nt

P = principal amount (the initial amount you borrow or deposit)

r  = annual rate of interest (as a decimal)

t  = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after n years, including interest.

n  =  number of times the interest is compounded per year 

=25(1+0.05) ^1 X5

=25 x (1.05)^5

=25 x 1.27628156 

= 31.9070391 

The value will be $31.9070391

Please let me know if you need any clarification. Thanks for the question
Jun 10th, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Jun 10th, 2015
...
Jun 10th, 2015
Oct 18th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer