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kompoz [17]
2 years ago
13

You made an investment of $12,000 into an account that paid you an annual interest rate of 3.5 percent for the first 5 years and

7.9 percent for the next 15 years. What was your annual rate of return over the entire 20 years
Business
1 answer:
Whitepunk [10]2 years ago
4 0

Answer:

interest rate r = 6.78 %

Explanation:

given data

investment = $12,000

interest rate = 3.5 percent = 0.035

time = 5 year

interest rate =  7.9 percent = 0.079

time = next 15 year

to find out

What was your annual rate of return over the entire 20 years

solution

we get here interest rate as

interest rate r = [(1+r)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1     ...................1

here t1 is time period for first 5 year and t2 is time i.e next 15 year and r1 and r2 is rate

now put here value we get

interest rate r = [(1+)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1

interest rate r = [(1+0.035)^{5} * (1+0.079)^{15}]^{\frac{1}{5+15}} - 1

interest rate r = 1.0678 - 1

interest rate r = 0.0678

interest rate r = 6.78 %

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Albright Company purchased as a long-term investment $500,000 of Benton Corporation 10-year, 9% bonds. Required: Present entries
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Answer:

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Dr Investment in securities 500,000

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Securities were sold at 98 or $250,000 x 98% = $245,000, which means that the company lost $5,000 with that investment.

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Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5. 2%
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8 0
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