00:01
So from the rule of time we have that.
00:03
If a variable grows at the rate of x per year, then the variable gets doubled in approximately 20 divided by x years.
00:15
So for part a, the future value of bond a within 20 years and bond b within 40 years is given as $8 ,000.
00:26
When the interest rate is 3 .5%, then a cost according to the rule of thumb or the rule of 70.
00:35
The future value of the bond will get doubled in 70 divided by 3 .5 or 20 years.
00:47
That's for part 8.
00:49
And now the period of bond a has to be 4 ,000 so that in future value can be 8 ,000 in 20 years.
01:00
Similarly, the period of bond a, sorry, bond b has to be 2000 so that its future value can be 1 ,000 in 40 years.
01:12
That is in 20 years the fv of bond b will be 4 ,000 in the next 20 year...