Question: Correct answers only please. Thanks so much! Question #3: Equivalent interest rates and doubling time. a. Interest is compounded twice per year for 10 years

Correct answers only please. Thanks so much!

Question #3: Equivalent interest rates and doubling time.

a. Interest is compounded twice per year for 10 years at a rate of r_s = 3.00% per annum. Find the equivalent interest rate r_Afor annual compounding and r for continuous compounding.

b. Find the number of years required for your balance to double if interest is compounded annually at rate r_A, twice per year at rate r_s and continuously at rate r. Give your answer correct to within one-tenth of a year.

c. Use the Rule of 72 to estimate the doubling time. How does this compare with your answer from part b?

d. Consider an asset that pays N at maturity 15 years from now. If the present value of the asset is $300 find N. Compute N for interest compounded annually at rate r_A and interest compounded continuously at rate r (use the interest rates from part (a)).

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