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What is R, the expected

What is R, the expected

Essentials Of Investments
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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Sasha owns two investments, A and B, that have a combined total value of 41,800 dollars. Investment A is expected to pay 24,700 dollars in 3 year(s) from today and has an expected return of 3.64 percent per year. Investment B is expected to pay 31,827 in 4 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? (Answer as an annual rate in decimal format so that 12.34% would be entered as 0.1234 and 0.98% would be entered as 0.0098.)
Transcribed Image Text:Sasha owns two investments, A and B, that have a combined total value of 41,800 dollars. Investment A is expected to pay 24,700 dollars in 3 year(s) from today and has an expected return of 3.64 percent per year. Investment B is expected to pay 31,827 in 4 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? (Answer as an annual rate in decimal format so that 12.34% would be entered as 0.1234 and 0.98% would be entered as 0.0098.)
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