The formula below tells us how to obtain the maturity value on a simple discount loan if we are given the proceeds, the discount rate, and the term. M = T-dRT If a loan's annual simple discount rate is 3.34%, how many years would it take for the debt to double? (This is called the doublin time of a loan). Round your answer to the nearest tenth of a year. Hint: divide both sides of the equation by P. If M is twice as much as P, what should the fraction on the left-hand side equal?
The formula below tells us how to obtain the maturity value on a simple discount loan if we are given the proceeds, the discount rate, and the term. M = T-dRT If a loan's annual simple discount rate is 3.34%, how many years would it take for the debt to double? (This is called the doublin time of a loan). Round your answer to the nearest tenth of a year. Hint: divide both sides of the equation by P. If M is twice as much as P, what should the fraction on the left-hand side equal?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The formula below tells us how to obtain the maturity value on a
simple discount loan if we are given the proceeds, the discount rate,
and the term.
M = T-dRT
If a loan's annual simple discount rate is 3.34%, how many
years would it take for the debt to double? (This is called the doublin
time of a loan).
Round your answer to the nearest tenth of a year.
Hint: divide both sides of the equation by P. If M is twice as much as P,
what should the fraction on the left-hand side equal?
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