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Safari File Edit View History Bookmarks Window Help webassign.net Shot Screen Shot Screen Shot Screen Shot 2.39 PM 2015-0...4.16 PM 2015-0...2.41 PM 2015-0...8.43 PM 14. 0/3 points | Previous Answers TanFin11 5.1.066 My Notes Ask Your Teacher 5-0...2.41 PM 201 Maria, who is now 52 years old, is employed by a firm that guarantees her a pension of $35,000/year at age 65. What is the present value of her first year\'s pension if the inflation over the next 13 years is 2%/year compounded continuously? 3%/year compounded continuously? 5%/year compounded continuously? (Round your answers to the nearest cent) at 2%/year $27056 Shot Screen Shot 1.54 AM 2015-0.4.21 PM 2015-0.. .3.31 PM 2015-0...2.47 PM Screen Shot Screen Shot at 3%/year $ 23833 at 5%/year $18561 Need Help?Read ItChat About It Screen Shot Screen Shot Shot 7.52AM 2015-0.47,17 AM 2015-0…3.36PM 2015-0 6.09AM Screen Shot AM 2015-3.36 PM 2015-0...6.09 AM 15. 0/1 points | Previous Answers TanFin11 5.1.070 My Notes Ask Your Teacher Screen Shot Screen Shot Shot .55 AM 2015-0...0.11 AM 2015-0..3.40 PM 2015-0...6.18 AM Screen Shot Use the formula for the effective rate (annual effective yield) ref = (A/P)1/t-1 where P is an initial investment in dollars, A is an accumulated amount in dollars, and t is time in years, to solve the exercise. Screen Shot Shot 58 AM 2015-0...0.20 AM 2015-0..3.47 PM 2015-0...6.24 AM Screen Shot Screen Shot Martha invested $40,000 in a boutique 5 years ago. Her investment is worth $70,000 today. What is the effective rate (annual effective yield) of her investment? (Round your answer to two decimal places.) 0.1184 Need Help?Read ItChat About It Shot Screen Shot Screen ShotScreen Shot 3.39 PM 2015-0…0.37AM 2015-0 3.53 PM 2015-0 0.07 PM 99 PM 2015-0..0.37 AM201-0..3.53 PM 2015-0.0.07 PM Submit Answer Save Progress Practice Another Version 16. + 1 points TanFin11 5.1.084 Notes +Ask Your Teacher ShotScreen Shot 9.03PM 2015-0 3.51 PM 2015-0…0.53AM 2015-0 4.10 PM 2015-0 0.09 PM Screen Shot Screen Shot Screen Shot AM 2015-0. .4.10 PM 2015-0..0.09 P 29 
Solution
reff = (A/P)^(1/t) - 1
A = $70000
P = $40000
t=5
reff = (70000/40000)(1/5) - 1 = 1.1184 - 1 = 0.1184
reff = 0.1184
% reff = 11.84%
