The value or an investment increases by 18 each month a Wha

The value or an investment increases by 1.8 % each month, a. What is the 5-month percent change? 18.896 % 9% 9.330% 0.36% None of the above The value of the investment on August 1, 2010 is how many times as large as the value of the investment on March 1, 2010? The value of the investment on June 1, 2011 is how many times as large as the value of the investment on June 1, 2011 is how many times as large as the value of the investment on June 1, 2010? What is the 1-growth factor? e. What is the 3-year growth factor? Select all that apply. 1.2387 + 3 1.018.3 1.018^36 1.2387.3 ((1.018)^12)^3) None of above

Solution

so, per month increase in investment is 1.8%, so growth factor for one month is 1.018

c)

from June 1,2010 to June 1,2011, there will be an year gap, that is 12 month. Growth factor will be (1.018)¹²=1.2387 , hence, this much larger.

d) 1 year growth factor is as calculated above = 1.2387

e) 3 year growth factor = ( 1.018 )^12*3

Or, (1.2378)³