ECON 11A Midterm: ECON11A Test 2017 Winter Solutions
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Solutions econ 11a: a certi cate of deposit o ers an interest rate of 5. 5% compounded daily for a term of 4 years. If p0 is invested at an interest rate r, compounded k times per year, then the value of the investment (the compound amount) after t years is given by (cid:16) P (t) = p0 (see chapter 4 in the textbook for more details). In this problem, we know p (4), r and k and we want to know p0: (cid:18) (cid:19)1460 1. 246056p0 = p0 = 25000/1. 246056 20063. 3. 365: use the change of base formula to compute the following logarithms. Do not use a calculator express your answers in terms of ln 2, ln 3, ln 5, and ln 7. For example log7 100 = ln 100 ln 7 ln 102 ln 7. 2 ln 2 + 2 ln 5 ln 7 (a) log5 36 = ln 36 ln 5.
