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Vladimir [108]
3 years ago
7

Suppose an investment offers to triple your money in 48 months (don't believe it). Required: What rate of return per quarter are

you being offered? ?
a) 9.59%
b) 7.82%
c) 5.31%
d) 6.4%
e) 711%
Business
1 answer:
Daniel [21]3 years ago
3 0

Answer:

Rate of return per quarter = 7.11%

Explanation:

<em>The rate of return is the percentage return  earned  if compounding  is done quarterly. It can be worked as follows:</em>

r= (FV/PV - 1)- 1× 100

r- rate of return

FV= Future value of the investment after 48 months

PV= Amount invested now

Let the amount invested i.e PV be 10.

If the investment is tripped, the sum earned would be 3×10 = 30

DATA

FV- 30

PV- 10

n-48/3= 16

r= ?

r = ((30/10)^1/16 -1 )× 100

r= 7.1075  × 100 = 7.11%

r= 7.11%

Rate of return per quarter = 7.11%

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