Problem 7-11

You purchase a stock for $20 and expect its price to grow annually at a rate of 9 percent. Use Appendix A to answer the questions. Round your answers to the nearest cent.

1. What price are you expecting after seven years? $_________

2. If the rate of increase in the price doubled from 9 percent to 18 percent, would that double the increase in the price? Doubling the growth rate ____(Select: more than doubles; less than doubles; doubles)____ the price appreciation. The increase in the price at 9% is $_____ and at 18% is $_____ .

Problem 7-11 You purchase a stock for $20 and expect its price to grow annually at a rate of 9 percent. Use Appendix A to answer the questions. Round your answers to the nearest cent. a. What price are you expecting after seven years? b. If the rate of increase in the price doubled from 9 percent to 18 percent, would that double the increase in the price? Doubling the growth rate -Select- the price appreciation. The increase in the price at 9% is $ and at 18% is $