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Alex787 [66]
3 years ago
14

n the first two years your investment increases by 2.5% annually, in the third year it returns 12% but in the fourth year it goe

s down 7%. The "average rate of return" is determined using the geometric mean. What is the average annual rate of return over the four years
Business
1 answer:
mote1985 [20]3 years ago
5 0

Answer:

Ans. The average annual rate of return over the four years is 2.792%

Explanation:

Hi, first let´s introduce the formula to use

r(Average)=\sqrt[n]{(1+r(1))*(1+r(2))*(1+r(3))+...(1+r(n))}-1

Where:

r(1),(2),(3)...n are the returns in each period of time

n =number of returns to average (in our case, n=4).

With that in mind, let´s find the average annual return over this four years.

r(Average)=\sqrt[4]{(1+0.025)*(1+0.025)*(1+0.12)+(1-0.07))} -1=0.022792

Therefore, the average annual return of this invesment in 4 years is 2.2792%

Best of luck.

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What other factors might help you in deciding whether eBay has been a success as a business
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3 years ago
John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6 percent per year. What is the remaining
dangina [55]

Answer:

$211,689. 53

Explanation:

Calculation to determine the remaining balance (or value) of the mortgage after the payment of the fifth annual installment

Step 1 is to compute PMT using Financial calculator

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6 0
2 years ago
Plz plz plz plz help me !!!!!!!
monitta

3. I would want the elected representative to support this. If there is a tax on clothing coming in then it would be more expensive and less people will buy it.

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6 0
2 years ago
Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $175, 846, net annual cash flow
alexira [117]

Answer:

NPV = $11400

As the NPV from the project is positive, the investment should be made.

Explanation:

The NPV or net present value is an important metric that is used for project and investment evaluation. The NPV is the present value of the series of cash flows provided by the project less the initial cost incurred to undertake the project. NPV can be calculated as follows,

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As the NPV from the project is positive, the investment should be made.

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2 years ago
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