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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Transcribed Image Text:A local bank is running the following advertisement in the newspaper: "For just $5,000 we will pay you $400 forever!" The fine print in the ad says that for a
$5,000 deposit, the bank will pay $400 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)?
20
2021
The interest rate the bank is advertising is %. (Round to the nearest integer.)
2021-
Scree
2021-12.
Screen
2021-12
O Time Remaining: 00:28:45
Next
11
DII
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