inancil math 251 question

Mathematics
Tutor: None Selected Time limit: 1 Day

In return for 100,000 at times 0, an investor receives x at times 5 and 2x at times 15. Interest is calculated at a simple effective interest rate of 10%. Determine the value of x using a determination date of t*=10%

Sep 13th, 2015

Thank you for the opportunity to help you with your question! IF you have any clarification, please don't hesitate to ask and I will do my best to answer. ++++++++++++

Future value of any amount = amount invested * (1 + interest rate)time

Times 5

Value of x at times 5 = $100,000*(1+10%)^5 = $161,051

Amount to be received at times 5 = x = $161,051

Times 15

Value of x at times 15 = $100,000*(1+10%)^15 = $417,724.81

Amount to be received at times 15 = 2x = 2*$417,724.81 = $835,449.62


Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 13th, 2015

One more quick question. The next question on the homework is the same information but instead of simple effective interest rate it just says simple interest rate. Would the answer change? I assume it does

Sep 14th, 2015

Yes, it will change.

Sep 14th, 2015

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