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Alex_Xolod [135]
3 years ago
7

7. An investment costs $1,000 (CF at T = 0) and is expected to produce cash flows of $50 at the

Business
1 answer:
Sergeeva-Olga [200]3 years ago
8 0

Answer:

5.0%

Explanation:

You can solve this using financial calculator .I'll be using (Texas Instruments BA II Plus)

<em>Note; If using same calculator as mine, key in the number first then the function key.</em>

Initial investment ; PV = -1000

Recurring payment ; PMT = 50

Duration of investment; N = 5

Future Value at the end of 5 years ; FV = 1000

Then CPT I/Y = 5%

Therefore, the expected rate of return on this investment would be 5%

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Jada, when she turned 38, made an investment of $25,000 at an interest rate of 7.8% per year, compounded every 3 months. Now tha
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