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Answer:
- <u>The rate of return is 8.15%</u>
- <u>This is a good investment</u>
<u></u>
Explanation:
For the first question, you need to find the rate that makes the present value of a stream of ten constant annual payments of $15,000 equal to the $100,000 investment.
The formula that returns the present value of a constant payment is called the annuity formula and is:
In your problem you know:
- Present value: $100,000
- payment: $15,000
- r: ?
- t: 10
You cannot solve for r directly. You must guess a value and calculate the right side of the equation until to you find the rate that makes it equal to 100,000.
Try 5%:
Then, the rate of return is greater than 5%. After several trials you will find that the rate of return is 8.15%.
Since this rate is higher than 8%, which is what the company requires, this is a good investment.
9514 1404 393
Answer:
see attached
Step-by-step explanation:
The first two x-values, -4 and 0, fall in the first part of the function definition.
There is no function definition for x = 4, as the second part only applies for x > 4.
The last x-value, 8, falls in the second part of the function definition.
The function is evaluated by putting the x-value where x is in the expression and doing the arithmetic. For example, ...
h(-4) = -(-4+1)^2 +7 = -(-3)^2 +7 = -9 +7 = -2
h(0) = 6
h(4) = undefined
h(8) = -8/3
