- #1
KatieLynn
- 65
- 0
intrest rates/investment problem (pert), I just need someone to check my work:)
1)Cindy requires $10,000 in 3 years to return to college to get and MBA degree. How much money should she ask her parent for now so that, if she invests it at 12% compounded continuously, she will have enough for school?
2)Carla just inherited a building that is worth $250,000. The building is in a high demand area, and the value of the building is projected to increase at a rate of 25% per year for the next 4 years. How much more money will she make if she waits for four years to sell the building instead of selling it now?
P=Ae^(-rt)
1)so the equation would be
P= (10,000)e^(-.12*3) which equals $6,977 correct?
2)A=Pe^(rt)
A= $250,000e^(.12*4) = $679,570
so then $679,570-$250,000=$429,570
is all that correct?
Homework Statement
1)Cindy requires $10,000 in 3 years to return to college to get and MBA degree. How much money should she ask her parent for now so that, if she invests it at 12% compounded continuously, she will have enough for school?
2)Carla just inherited a building that is worth $250,000. The building is in a high demand area, and the value of the building is projected to increase at a rate of 25% per year for the next 4 years. How much more money will she make if she waits for four years to sell the building instead of selling it now?
Homework Equations
P=Ae^(-rt)
The Attempt at a Solution
1)so the equation would be
P= (10,000)e^(-.12*3) which equals $6,977 correct?
2)A=Pe^(rt)
A= $250,000e^(.12*4) = $679,570
so then $679,570-$250,000=$429,570
is all that correct?