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7 you won a small sweepstakes prize. Your winnings will be split into 12 $2.000 starting from today. If the annual rate of return you

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7

you won a small sweepstakes prize. Your winnings will be split into 12 $2.000 starting from today. If the annual rate of return you can get at your han present value of your winnings? lit into 12 monthly payments your bank is 3%, what is the 6. You put $250 into an account at the end of each year for 5 years. At the end of the 5th account was worth $1,750. What annual rate of return did you earn? reture value of nuty 1750 7. An investment will produce the following end-of-year cash flows: Year one Year two $200 Year three $800 $500 If the required rate of return is 12% annually, what is the most you should be willing to pay for this investment? 8. Warren Buffet began buying shares in Berkshire Hathaway in 1962. At that time a share of the company was traded at $18.00. The price one day in 2019 was $308,139. Considering only the capital gain (and not the dividends paid) what is the average annual return for this company? 308139 303

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