Question

Refer to the situation described in BE 6-2. Assume that the trip will cost $26,600. What interest rate, compounded annually, must Bill earn to accumulate enough to pay for the trip?
In BE 6-2, Bill O'Brien would like to take his wife, Mary, on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $20,000 inheritance from an uncle and intends to invest it for the trip. Bill estimates the trip will cost $23,500 and he believes he can earn 5% interest, compounded annually, on his investment. Will he be able to pay for the trip with the accumulated investment amount?




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  • CreatedJune 24, 2013
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