Rule of 69.3 a corollary to the Rule of 72 is the Rule of 69.3. The Rule

Question:

Rule of 69.3 a corollary to the Rule of 72 is the Rule of 69.3. The Rule of 69.3 is exactly correct except for rounding when interest rates are compounded continuously. Prove the Rule of 69.3 for continuously compounded interest,

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

See More Books

Question Posted: Apr 28, 2011 02:29 AM

See More Questions

A corollary to the Rule of 72 is the Rule of 69.3. The Rule of 69.3 is exactly correct except for rounding when interest rates are compounded continuously. Prove the Rule of 69.3 for continuously...
Ignoring credit risk, when interest rates are random, must forward prices and futures prices be equal? Explain why or why not.
Prove corollary 5.2.3. We will not prove the second part of corollary 5.2.2, since it will not be used elsewhere in the book (see Luenberger 1984, p. 226; Simon 1986, p. 85). Instead we develop below...
Give the order of magnitude () for the following algorithm. Explain why your answer is correct. GET VALUES for A1, A2, ..., An, and B, B2, ..., Ba Get value of n /* set i equal to 1 */ /* for each of...
The object shown in FIGURE 10-38 can be rotated in three different ways: case 1, rotation about the x axis; case 2, rotation about the y axis; and case 3, rotation about the z axis. Rank these three...
Consider again Problem 2.1.3 where the numbers obtained on two fair dice are multiplied to obtain a final score. What is the expected value of this score? Problem 2.1.3 Suppose that two fair dice are...
The table shows the result of a survey that asked 4087 people whether they wore contacts or glasses. A person is selected at random from the sample. Find the probability of each event. (a) The person...
At December 31, 2017, the following information was available for E. Hetzel Company: ending inventory $40,000, beginning inventory $56,000, cost of goods sold $270,000 and sales revenue $380,000....
The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31. s a $27,689 a. On July 31, the company's Cash account has...
Using a linear programming framework and the data from case Exhibit 1, formulate and solve the problem of finding the cost-minimizing set of bids that meet Mars' business requirements and determines...
Rule of 72 Earlier, we discussed the Rule of 72, a useful approximation for many interest rates and periods for the time it takes a lump sum to double in value. For a 10 percent interest rate, show...
Treasury Bonds is it true that a U.S. Treasury security is risk-free?
A previously issued, A-rated 20-year industrial bond provides a return one-fourth higher than the prime interest rate of 9 percent. Previously issued public utility bonds provide a yield of one-half...
What strategies can be employed to ensure adequate process hazard analysis (PHA) methodologies are applied, incorporating layers of protection analysis (LOPA) and fault tree analysis (FTA) ?
A 39-year-old man presents with a history of poor urine output over the past 2 days. Other than bloody diarrhoea about a week ago, he has no other significant history. There were several other...
What are some of the Claims adjudicator's accountabilities? a. Ensuring all necessary information is present before payout. b. Dealing with our service partners: reinsurers. c. Goal is to pay the...
On January 1 , 2 0 1 3 , Lindsay Owens opened Picture Perfect, a small retail store that sells picture frames, crafts & art. On June 3 0 , 2 0 1 4 , her accounting records show the following: Store...
What data in the financial analysis should be included in the strategic plan for crossing over into the cloud computing market?
Integrate equation (15.3.14) to obtain \[ \boldsymbol{r}(t)=\boldsymbol{v}(0) \tau\left(1-e^{-t / \tau} ight)+\tau \int_{0}^{t}\left\{1-e^{(u-t) / \tau} ight\} \boldsymbol{A}(u) d u \] so that...
The National Collegiate Athletic Association (NCAA) and the National Federation of State High School Associations (NFHS) set a new standard for non-wood baseball bats. Their goal was to ensure that...
Think of your current roommate(s) or people you have lived with in the past, and provide an example of a household task that you have an absolute advantage completing and a household task you have a...
If you choose to enter the year with $400 total in cash, what is your maximum short-term borrowing (see MyFinanceLab for the data in Excel format)?
If you want to limit your maximum short-term borrowing to $500, how much excess cash must you carry (see MyFinanceLab for the data in Excel format)?
The Hand-to-Mouth Company needs a $10,000 loan for the next 30 days. It is trying to decide which of three alternatives to use: Alternative A: Forgo the discount on its trade credit agreement that...
(3) Calculate m(R) (volume of R) Given: R is the region of the 3- dim space, defined by: 3 Upper border: Z = 92 (x, y) = 3x+5y3 Lower border: Z = 9, (x,y) = x+y xy projection: D= pr (R) = triangle...
Explain what is Model, Strategy, Algorithm in math teaching? How is it similar/compare to 'algorithm' language of borrow or carry over in subtraction
Directions and Info for Building 1. Use a program where you can draw and type, like pages, or you can draw this out on a piece of paper and take a picture to submit. 2. You will begin with the...

Rule of 69.3 a corollary to the Rule of 72 is the Rule of 69.3. The Rule

Question:

Step by Step Answer:

We are only concerned with the time it takes money to double so the dollar am...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Corporate Finance questions