Economics Homework Help
SMC Rate of Return of A Particular Investment & the Rule of 72 Formula Analysis
Read Chapter 2 and review last week’s lecture video on the topic about the Rule of 72 and then answer the following questions:
There will be no extra credits so be sure to submit your answers and show all relevant steps logically, clearly, and correctly! Failure to do so will result in points being deducted from the problems, even if you have the correct answers. If you get it wrong you miss the entire points associated on that particular question. So be sure to be cautious about it.
When you are ready, do the problem on a piece of paper, save it on a pdf, and then submit it as an attachment by the due date and time (see below). No need to type up the solutions unless you want to; but if you choose to write it out, make sure your steps are legible or you won’t be getting the credits.
Ready? Here they are:
- Assuming your rate of return of a particular investment is 4 percent annually, how long will it take for the investment to double? 2 points.
- Assuming now the rate of return rises to 6 percent annually, how long will it take for the investment to double? 2 points.
- If you would like the investment to double in 6 years, what must the rate be for that to be realized? 2 points.
- Compute the future value (FV) of $10,000, assuming it is being invested in an investment account earning 12% per year for a total of 45 years. 2 points.
