Question
1. a.) You loan a friend $200 and are repaid $30 at the end of each month for the first 3 months and $120 at
1. a.) You loan a friend $200 and are repaid $30 at the end of each month for the first 3 months and $120 at the end of the fourth month. What is your rate of return?
b.) You loan a friend $200 and are repaid $120 at the end of the first month and $30 at the end of each month for the next three months. What is your rate of return?
2. You purchased stock 13 years ago for $5,500 and incurred $100 in brokerage fees. You received dividends of $250 at the end of each of the first 3 years, no dividends at the end of years 4 through 11, and $150 at the end of the 12th year. Immediately after receiving a $300 dividend at the end of the 13th year, you sold the stock for $21,400 and incurred brokerage fees of $300. Calculate your rate of return.
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