The buying and selling commission schedule shown in the table is from an online discount brokerage firm. Taking into consideration the buying and selling commissions in this schedule, find the annual compound rate of interest earned on the investment. Transaction Size Commission Rate $0 - $1,500 $1,501 - $6,000 $29 + 2.5% of principal $57 + 0.6% of principal $6,001 - $22,000 $75 + 0.30% of principal $97 +0.20% of principal $147 +0.10% of principal $247 + 0.08% of principal An investor purchases 125 shares of stock at $50 per share, holds the stock for 5 years, and then sells the stock for $22,001 - $50,000 $50,001 - $500,000 $500,001 + $115 a share. क O A. I-Prt, where I is the interest, Pis the principal, r is the annual simple interest rate, and t is the time in years OB. A-P(1+ rt), where A is the amount, Pis the principal, r is the annual simple interest rate, and tis the time in years O C. A-Pe" where A is the amount at the end of t years if P is the principal invested at an annual rate r compounded continuously OD. A P(1+)", where i- nominal rate, m is number of compounding periods per year, i is rate per compounding period, and n is total number of compounding periods and A is the amount at the end of n periods, P is the principal value, r is the annual The annual rate of interest is%.
The buying and selling commission schedule shown in the table is from an online discount brokerage firm. Taking into consideration the buying and selling commissions in this schedule, find the annual compound rate of interest earned on the investment. Transaction Size Commission Rate $0 - $1,500 $1,501 - $6,000 $29 + 2.5% of principal $57 + 0.6% of principal $6,001 - $22,000 $75 + 0.30% of principal $97 +0.20% of principal $147 +0.10% of principal $247 + 0.08% of principal An investor purchases 125 shares of stock at $50 per share, holds the stock for 5 years, and then sells the stock for $22,001 - $50,000 $50,001 - $500,000 $500,001 + $115 a share. क O A. I-Prt, where I is the interest, Pis the principal, r is the annual simple interest rate, and t is the time in years OB. A-P(1+ rt), where A is the amount, Pis the principal, r is the annual simple interest rate, and tis the time in years O C. A-Pe" where A is the amount at the end of t years if P is the principal invested at an annual rate r compounded continuously OD. A P(1+)", where i- nominal rate, m is number of compounding periods per year, i is rate per compounding period, and n is total number of compounding periods and A is the amount at the end of n periods, P is the principal value, r is the annual The annual rate of interest is%.
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:The buying and selling commission schedule shown in
the table is from an online discount brokerage firm.
Taking into consideration the buying and selling
commissions in this schedule, find the annual
compound rate of interest earned on the investment.
Transaction Size
Commission Rate
$0 - $1,500
$29 +2.5% of principal
$57 + 0.6% of principal
$1,501 - $6,000
$6,001 - $22,000
$75 + 0.30% of principal
$97 + 0.20% of principal
$147 +0.10% of principal
$247 + 0.08% of principal
An investor purchases 125 shares of stock at $50 per share, holds the stock for 5 years, and then sells the stock for
$22,001 - $50,000
$50,001 - $500,000
$500,001 +
$115 a share.
O A. I= Prt, where I is the interest, P is the principal, r is the annual simple interest rate, and t is the time in years
O B. A=P(1+ rt), where A is the amount, P is the principal, r is the annual simple interest rate, and t is the time in
years
OC. A=Pe", where A is the amount at the end of t years if P is the principal invested at an annual rate r
compounded continuously
OD.
A= P(1 + i)", where is
-, and A is the amount at the end of n periods, P is the principal value, r is the annual
nominal rate, m is number of compounding periods per year, i is rate per compounding period, and n is total
number of compounding periods
The annual rate of interest is %.
(Round
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