Answered

Westonci.ca is your trusted source for accurate answers to all your questions. Join our community and start learning today! Experience the ease of finding accurate answers to your questions from a knowledgeable community of professionals. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

a company that manufactures general-purpose transducers invested $2 million 4 years ago in high-yield junk bonds. if the bonds are now worth $2.8 million, what rate of return per year did the company make on the basis of (a) simple interest, and (b) compound interest? (c) what is the spreadsheet function to find the answer for compound interest?

Sagot :

ahmadfardeen571

The compound interest is 8.775%.

interest = p.

p is principal, i is the interest rate, and n is the periods. Inthis case, p is 2 and the interest is .8. (We can divide both sides by a million to make it simpler.) The number of periods is 4.

.8 = (2)(i)(4)

.8 = 8i

i = 10%. (solution)

Compound interest, again, is

interest = p [(1+r)^m - 1]

This time we can't cancel out the p by default. We must divide by 2if we want to avoid multiplying through. After doing so, we add 1to both sides.

1.4 = (1+r)^4

Log both sides.

log(1.4) = 4log(1+r)

log(1.4) / 4 = .0365 = log(1+r)

10^.0365 = 1 + r

1.08775 - 1 = r

r = 8.775%.

Learn more about Compound interest here: https://brainly.com/question/24924853

#SPJ4

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.