A local bank is running the following advertisement in the newspaper: For just $3000 we will pay
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A local bank is running the following advertisement in the newspaper: “For just $3000 we will pay you $180 forever!” The fine print in the ad says that for a $3000 deposit, the bank will pay
$180 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the IRR of this investment)?
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