Your good friend Andrew told you that his grandmother just passed. As the family went through her belongings, they found a set of stock certificates for a company called Pecan Perfection. The company bakes the best pecan pies. His grandma bought the stock 45 years ago for $500. After some investigation, it was found that his grandma's original investment was now worth $399,742. What was the average annual return of Andrew's grandma's investment over the past 45 years? (Please answer with two decimal places and without the percent sign.)

Your good friend Andrew told you that his grandmother just passed. As the family went through her belongings, they found a set of stock certificates for a company called Pecan Perfection. The company bakes the best pecan pies. His grandma bought the stock 45 years ago for $500. After some investigation, it was found that his grandma's original investment was now worth $399,742. What was the average annual return of Andrew's grandma's investment over the past 45 years? (Please answer with two decimal places and without the percent sign.)

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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Similar questions

Lydia bought a rental house for $500,000. She rented it for 5 years at $2,700/month, At the end of the 5th year, she sold it for $550,000. Assume no other cash flows. What was her average annual rate of return on this investment?
Sheldon put $500 into a certificate of deposit at his bank. In six months the value of the CD is $620. What is his ROI? Penny invested $10,000 into the stock market. She sold the stock two days later for $13,500. What is her ROI? Leonard bought a bond for $5,000 and sold it for $5,300 four years later. What is his ROI? Howard bought a house for $250,000 and sold it for $227,000 ten years later. What is his ROI? Raj bought a tractor for $25,000 and sold it for $32,000 one year later. What is his ROI? Amy put $50 in a savings account. A year later the balance on the account is $58. What is her ROI?
2
Jenny's net worth increased from $600,000 to $750,000 this year. During the year, she inherited $50,000 in stocks and bonds. Jenny earned a salary of $80,000 and saved $10,000 of her salary in her 401(k) plan. Jenny contributed $3,000 to her IRA from her checking account. She also used $5,000 from her money market to purchase new bedroom furniture. Her investments grew by $75,000. Assuming these are all of her transactions, what was the principal reduction on her mortgage? $5,000 $10,000 $15,000 $20,000 $25,000
Your mom just checked on findmassmoney.gov and found out that she has unclaimed property that is worth $3015.54 today. She figured out that she had invested $866 years ago and she calculated that she earned a return of 28.08% on her money. How many years ago did your mom invest that money? Include up to 2 decimal places.
Mrs Galicia gave her sisters $3000 each to invest. The investment will last 8 years. The table shows what each sister did with their investment and how it changed over 8 years. Use the chart to answer the following questions please 1. What is the balance of Michelle's $3000 after 8 years? 2. What is the balance of Kristen's $3000 after 8 years? 3. What is the balance of Gabriella's $3000 after 8 years? 4. What is the balance of Judy's $3000 after 8 years? 5. Who has the most money at the end of the 8 years? If i were to choose one of the options to use for my own money, which option should I choose?
Martha bought a home in 1988 at a cost of $100,000.00. She put 20% down and financed the remainder by way of a mortgage. She paid the mortgage off in 20 years. Over the years, she spent $45,000 improving and updating the house. Martha sold her home last year for $310,000.00 What was the value of Martha's equity in her home?
9 years ago Mary purchased shares in a certain mutual fund at Net Asset Value (NAV) of $96. She reinvested her dividends into the fund, and today she has 7.7% more shares than when she started. If the fund's NAV has increased by 39.5% since her purchase, compute the rate of return on her investment if she sells her shares today. Round your answer to the nearest tenth of a percent.
A gentleman bought a limited edition Wolverine figurine in 1974 for $0.15. In 2012, 38 years later, he sold it for $36,900. What return did he earn per year over those 38 years?
Larry purchased an annuity from an insurance company that promises to pay him $9,000 per month for the rest of his life. Larry paid $946,080 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $9,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he receives the 100th payment?
Jerry invested $5,400 in a small business venture and received $9,200 twenty years later. What is the rate of return on the investment? O 2.46% 2.48% 2.70% O 2.51%
Ashley purchased a common stock worth $5,000 in year 1 and another worth $10,000 in year 5. Five years after her last investment, she sold all her stocks to a buyer for $80,000. Find the rate of return received on the investment.

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