Andy has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for 5 years to pay his way through college. He needs $5000 to purchase an old pickup, some ladders, a paint sprayer, and some other equipment. He is promising to pay you $1500 at the end of each summer (for 5 years) in return. Calculate your annual rate of return.

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A: Computation:

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A: let payment be = A r=9% m=12 (monthly compounding) n =4 FVA = $8000

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A: (1): EAR = (1+r/n)^n - 1 = (1+9%/2)^2 - 1 = 9.2025%   Now amount accumulated in Investment 1 after…

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A: Loan Proceeds are the amount that is disbursed from a loan, which is usually lesser than the loan…