Suppose the government decides to issue a new savings bond that is guaranteed to double in value if you hold it for22 years. Assume you purchase a bond that costs $100.

a.

What is theexact rate of return you would earn if you held the bond for22years until it doubled in value?

b.

If you purchased the bond for $100 in 2017 at the then current interest rate of .14 per year, how much would the bond be worth in 2028?

c.In 2028, instead of cashing in the bond for its then current value, you decide to hold the bond until it matures in 2039. What annual rate of return will you earn over the last 11 years?