Circle all final answers. Show all work. Don’t forget units. Round all answers t

Question

Circle all final answers. Show all work. Don’t forget units. Round all answers to the nearest dollar and always round up (i.e. $123.45 is $124 and $12.34 is $13). Only round your final answer. Read the Homework Guidelines document in CatCourses for more information. You MUST staple your homework before you hand it in.

Problem 2.18 (20 pts) You bought 300 shares of Facebook (FB) stock at $54,000 on November 9, 2017. Your intention is to keep the stock until it doubles in value. If you expect 8% annual growth for FB stock, how many years do you anticipate holding onto the stock? (Round UP to the nearest year)

Explanation / Answer

Value of facebook total share at 2017 = 54000
Rate of growth = 8%
Value of facebook after (n) number of years = 108,000
108,00 = 54,000 * ( 1 + 8%)n
108,000/54,000 = 1.08n
2 = 1.08n
Applying Log
log 2 = log(1.08n)
n = log(2)/Log(1.08) = 9.0006 or 10 years rounding up

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