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soldi70 [24.7K]
3 years ago
7

An initial investment of $41,800 fifty years ago is worth $1,533,913 today. What is the geometric average return on this investm

ent?
A)11.08 percent
B)10.47 percent
C)7.47 percent
D)9.23 percent
E)8.02 percent
Business
1 answer:
enyata [817]3 years ago
8 0

Answer:

C) 7.47%

Explanation:

Data provided in the question:

Initial investment = $41,800

Time, n  = 50 years

Future value = $1,533,913

Now,

Using the formula of compounding

Future value = Initial investment × ( 1 + r )ⁿ

here,

r is the geometric average return

thus,

$1,533,913 = $41,800 × ( 1 + r )⁵⁰

or

( 1 + r )⁵⁰ = 36.696

or

1 + r = 1.0747

or

r = 0.0747

or

r = 0.0747 × 100%

= 7.47%

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2. Jake has $1,574 in his checking account.  ⇒ STORE OF VALUE

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Explanation:

The four functions of money are:

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3 years ago
An insurer sells a very large number of policies to people with the following loss distribution: $100,000 with probability 0.005
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Answer:

a) $2000

b)  $1,886.7925

C) $2,036.7925

Explanation:

First, the question states to determine the expected claim cost per policy

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=$2,000 ÷ (1  + 0.06)

= $1,886.7925

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Answer:

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