12 of 21 13 complete This Test 21 pts possible Question Help

12 of 21 (13 complete) This Test: 21 pts possible Question Help * This Question: 1 pt Suppose that the NASDAQ Composite index hit a level of 4 688 in February of 2010. In February of 1992 t was at a level of 2,048. What was the annual average compound growth rate over the period? The annual average compound growth rate over the period was ?%. (Round to two decimal places.)

Solution

12)average annual groeth rate=((final/initila)^(1/n))-1
=((4688/2048)^(1/15))-1
=5.68%

18)let us find the final amount in both the cases and the difference is what we need
for 4.5%=560*(1+4.5%)^9
=832.21
for 6.1%=560*(1+6.1%)^9
=954.17
=954.17-832.21=121.96

19)first for 5 years the final amount= 17900*(1+3%)^5=20751.01
now this amount is invested for 8 years in 8%
=20751.01*(1+8%)^8
=38408.67
It is option A