assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assum vestment's value has decreased to $6,800 by the end of the year. a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rou lecimal places.) Rate of return % b) Is the rate of return a positive or negative number? O Positive O Negative

assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assum vestment's value has decreased to $6,800 by the end of the year. a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rou lecimal places.) Rate of return % b) Is the rate of return a positive or negative number? O Positive O Negative

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have of $1,000,000 to invest. There are two different investment options for you. First option: (1.21*i)% pays simple interest. Second option: pays i% compounding interest rate. What is the value of i that makes the both options pay the same money at the end of second year. Select one: a. 1.21 b. 42 c. 21 d. 5.5 e. 10
NEED FULLY CORRECT HANDWRITTEN SOLUTION FOR THIS....ASAP PLEASE BE FAST AND I'LL RATE POSITIVE FOR SURE.
The present value represents the amount of money you would have to deposit today in order to match what you would get from the income stream at the future date. The formula is Time = M = i Future value represents the total amount of money you would have if you deposit the income stream until a future date. The formula is To start our problem we need to identify the variables. Rate =r= i Income Stream S(t) = i Present Value = years % M 1. 0 S (t) et dt. Future Value = Present Value* erM dollars/year
An investment pays 2000 at the end of year 1 and 2000 at the end of year 2. It was purchased to yield an annual rate of 6%. Find the modified convexity for this investment. (Round your answer to the nearest two decimals.)
You're trying to choose between two different investments, both of which have up-front costs of $25,000. Investment G returns $60,000 in six years. Investment H returns $92,000 in nine years. Calculate the rate of return for each these investments. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Investment G Investment H % %
Consider the following investment. (Round your answers to the nearest cent.) $5,600 at 6 3/4% compounded quarterly for 8 1/2 years (a) Find the future value of the given amount.$ (b) Interpret the future value of the given amount. After 8 1/2 years, the investment is worth $ .
Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $288,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $36,000. The company's minimum desired rate of return for net present value analysis is 12%. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Compute the following: a. The average rate of return, giving effect to straight-line depreciation on the investment. If required, round your answer to one decimal place. 8 X %
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400 Year Payment 1 100 2 200 3 400 Rate 8% To find the PV, use the NPV function: Pv= $581.59 Year Payment x (1+ I)^(N- t) = FV 1 100 2 200 3 400
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Payment $100 $300 $500 Year 1 2 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $
You’re trying to choose between two different investments, both of which have upfront costs of K75,000. Investment G returns K135,000 in six years. Investment H returns K195,000 in 10 years. Which of these investments has the higher return?
Consider the following future value. (Round your answers to the nearest cent.)$4,472 at 10 3/4% compounded quarterly for 6 years (a) Find the present value that will generate the given future value. ____$ (b) Interpret the present value. One would have to invest ____$ now to have the future value in the given time.
An investment will pay $600 at the end of each of the next 2 years, $700 at the end of Year 3, and $1,000 at the end of Year 4. What is its present value if other investments of equal risk earn 6 percent annually? a. $1,821.82 b. $1,913.83 c. $2,297.07 d. $2,479.86 e. $2,735.85

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