Bond
A 2 year US Treasury bond has a 7.6% interest rate per month. If you put in an initial investment of $10,000, how much money would the bond be worth at maturity?
Expand Hint
The question is asking for the future worth,
$$F$$
, given the present value/worth,
$$P$$
.
Hint 2
Single Payment Compound Amount:
$$$F=P(1+i)^n$$$
where
$$i$$
is the interest rate per interest period, and
$$n$$
is the number of compounding periods.
The question is asking for the future worth,
$$F$$
, given the present value/worth (initial principal balance),
$$P$$
. Single Payment Compound Amount:
$$$F=P(1+i)^n$$$
where
$$i$$
is the interest rate per interest period, and
$$n$$
is the number of compounding periods.
$$$F=\$10,000(1+.076)^{(2\times 12)}=\$10,000(1.076)^{24}=\$58,008.88$$$
$58,008.88
Time Analysis
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