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A company that manufactures general-purpose transducers invested $ 2 million, 4 years ago, in high-yield junk bonds. If the bonds are now worth $ 2.8 million, what rate of return per year did the company make on the basis of: a) Simple interest, and b) Compound interest?

A company that manufactures general-purpose transducers invested $ 2 million, 4 years ago, in high-yield junk bonds. If the bonds are now worth $ 2.8 million, what rate of return per year did the company make on the basis of: a) Simple interest, and b) Compound interest?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company that manufactures general-purpose transducers invested $ 2 million, 4 years ago, in high-yield junk bonds. If the bonds are now worth $ 2.8 million, what rate of return per year did the company make on the basis of: a) Simple interest, and b) Compound interest?
Transcribed Image Text:A company that manufactures general-purpose transducers invested $ 2 million, 4 years ago, in high-yield junk bonds. If the bonds are now worth $ 2.8 million, what rate of return per year did the company make on the basis of: a) Simple interest, and b) Compound interest?
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