Question
13a) You just purchased an interesting investment in organic mushrooms for a total cost of $3,346. You expect to sell the entire investment in 101
13a) You just purchased an interesting investment in organic mushrooms for a total cost of $3,346. You expect to sell the entire investment in 101 months for $7,257. Given its riskiness, the expected return, E(r), on the investment is 9.8% when expressed as an EAR. Determine the effective IRR for this investment on a per-decade basis. Express your answer as a PERCENT, not as a decimal, with at least 4 significant digits.
13b) You just borrowed $10,609 from Bank of Big Wheels to buy a new motorcycle. Youll make monthly payments to pay off the loan. The first payment will be $37 and is due one month from today. Subsequent payments will grow at 1.1% per month. Monthly payments will continue forever (the loan is never paid off). The Bank is advertising an APR rate - with monthly compounding. Determine the APR rate that the bank is advertising for motorcycle loans. Express your answer as a PERCENT, not as a decimal, with at least 4 significant digits.
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