core: 0 of 1 pt 8 of 12 7 complete 4-29 (similar to) Question Help You work for a pharmaceutical company that has developed a new drug. The patent on the drug wil last 17 years. You expect that the drug's profits will be $2 million in its first year and that this amount will grow at a rate of 2% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will key drive profits to zero. What is the present value of the new drug if the interest rate is 7% per year? The present value of the new drug is $milion (Round to three decimal places.) You have an investment account that started with $4,000 10 years ago and which now has grown to $12,000. a. What annual rate of return have you earned (you have made no additional contributions to the account? b. If the investment account earns 15% per year from now on, what will the account's value be 10 years from now? a. What annual rate of return have you earned (you have made no additional contributions to the account)? Your annual rate of return is %. (Round to two decimal places.) Score: 0 of 1 pt 10 of 12 [7 completel HW Score: 41.67%, 5 of 12 p P4-35 (similar to) Question Help You are thinking of purchasing a house. The house costs $300,000. You have $43,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 10% per year. What will be your annual payment you in this morte? The annual payment is $(Round to the nearest dollar) Score: 0 of 1 pt 11 of 12 (7 completel HW Score: 41.67%, 5 of 12 pts P 4-38 (similar to) Question Help You are saving for retirement. To live comfortably, you decide you will need to save $1 million by the time you are 65. Today is your 20th birthday, and you decide starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 8%, how much must you set aside each year to make sure that you will have $1 million in the account on your 65th birthday? The amount to deposit each year is $(Round to the nearest dollar) Score: 0 of 1 pt 12 of 12 7 complete HW Score: 41.67%, 5 of 12 pts P 4-40 (similar to) 0 A local bank is running the following advertisement in the newspaper: "For just $1,000 we will pay you $60 foreverl" The fine print in the ad says that for a $1,000 deposit the bark will pay 360 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment? The interest rate the bank is advertising is % (Round to the nearest integer.)
