You hope to have $35,000 in your investment account in ten years. If you invest $25,000 today, what annual rate of return would your investment account need to generate if you make no future deposits? O 3.4% 3.8% 40.0% 1.7%
You hope to have $35,000 in your investment account in ten years. If you invest $25,000 today, what annual rate of return would your investment account need to generate if you make no future deposits? O 3.4% 3.8% 40.0% 1.7%
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:You hope to have $35,000 in your investment account in ten years. If you invest $25,000 today, what annual
rate of return would your investment account need to generate if you make no future deposits?
O 3.4%
O 3.8%
O 40.0%
O 1.7%
Expert Solution
Introduction,
Present value is a financial concept that represents the value of a future sum of money in terms of its worth today, given a specific interest rate and time period. It is based on the principle that a dollar received today is worth more than a dollar received in the future, because the dollar received today can be invested and earn interest or other returns over time.
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