First Colonial Bankshares Corporation advertised the following IRA investment plans. For each $5000 Maturity Value Desired Deposit:
Question:
First Colonial Bankshares Corporation advertised the following IRA investment plans.
For each $5000 Maturity Value Desired
Deposit: ……………………………….. At a Term of:
$620.17 ……………………………………. 20 Years
$1045.02 ……………………………………. 15 Years
$1760.92 ……………………………………. 10 Years
$2967.26 ………………………………….…. 5 Years
(a) Assuming continuous compounding, what annual rate of interest did they offer?
(b) First Colonial Bankshares claims that $4000 invested today will have a value of over $32,000 in 20 years. Use the answer found in part (a) to find the actual value of $4000 in 20 years. Assume continuous compounding.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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