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1. In 2006 Michael purchased a piece of land for $15,000. Today in 2020 the same land is worth $47,500. What is the average rate
1. In 2006 Michael purchased a piece of land for $15,000. Today in 2020 the same land is worth $47,500. What is the average rate of return Michael has earned from his investment?
a. 9.3%
b. 8.6%
c. 10.1%
d. 9.9%
2. Your brother gave you the best birthday gift ever. He purchased for you a perpetuity which makes $2500 annual payments. If the current interest rate in the market is 6%, how much did your brother spend on your gift?
a. 42,120
b. 41,667
c. 43,667
d. 40,560
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