Horizon financial services offers an investment product with the following terms of solve this question financial accounting question Horizon Financial Services offers an investment product with thefollowing terms: "Invest $5,000 today, and receive $400 annuallyforever!" The payments begin one year after the initial investment.Calculate the interest rate (rate of return) for this perpetuity investment.Options:a. 6%b. 7%c. 8%d. 9%e. 10%

Solve for r r = $400 / $5,000 r = 0.08 or 8% The correct option is (c) 8%.

Answered: Horizon Financial Services offers an…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Subject: finance
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