11

Time for a lump sum to double If you deposit money today in an account that pays 14.5% annual interest, how long will it take to double your money? Round your answer to two decimal places. years

12

Effective rate of interest

Find the interest rates earned on each of the following. Round each answer to two decimal places.

1. You borrow $750 and promise to pay back $780 at the end of 1 year.

   %

2. You lend $750 and the borrower promises to pay you $780 at the end of 1 year.

   %

3. You borrow $53,000 and promise to pay back $64,483 at the end of 5 years.

   %

4. You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years.

   %

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Present value

What is the present value of a security that will pay $18,000 in 20 years if securities of equal risk pay 4% annually? Round your answer to the nearest cent.

$