A local bank is running the following advertisement in the newspaper: "For just $2,000 we will pay you $180 forever!" The fine print in the ad says that for a $2,000 deposit, the bank will pay $180 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)? The interest rate the bank is advertising is %. (Round to the nearest integer.)
A local bank is running the following advertisement in the newspaper: "For just $2,000 we will pay you $180 forever!" The fine print in the ad says that for a $2,000 deposit, the bank will pay $180 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)? The interest rate the bank is advertising is %. (Round to the nearest integer.)
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...
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![A local bank is running the following advertisement in the newspaper: "For just $2,000 we will pay you $180 forever!"
The fine print in the ad says that for a $2,000 deposit, the bank will pay $180 every year in perpetuity, starting one
year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of
this investment)?
The interest rate the bank is advertising is %. (Round to the nearest integer.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae259756-8f06-4e5c-ae2d-b16c40451d6f%2Ffafce508-9bac-497a-bf87-c392c2f4409c%2Fnywiy79_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A local bank is running the following advertisement in the newspaper: "For just $2,000 we will pay you $180 forever!"
The fine print in the ad says that for a $2,000 deposit, the bank will pay $180 every year in perpetuity, starting one
year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of
this investment)?
The interest rate the bank is advertising is %. (Round to the nearest integer.)
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