In $2016,$ the automobile industry announced the average vehicle selling price was

$$34,958.$ Five years earlier, the average price was $$27,641.$ What was the annual

percentage increase in vehicle selling price?

You're trying to save to buy a new $4190,000$ BMW $3$ series sedan. You have $$40,000$

today that can be invested at your bank. The bank pays $4\mathrm{.}8\%$ annual interest on its

accounts. How long will it be before you have enough to buy the product?

Calculating Rates of Return $($LO$3)$ On February $2,2016,$ an investor held some Province

of Ontario stripped coupons in a self$-$administered RRSP at ScotiaMcLeod, an investment

dealer. Each coupon represented a promise to pay $$100$ at the maturity date on January

$13,2022,$ but the investor would receive nothing until then. The value of the coupon

showed as $$76\mathrm{.}04$ on the investor's screen. This means that the investor was giving up

$$76\mathrm{.}04$ on February $2,2016$ in exchange for $$100$ to be received just less than six years

later.

a$.$ Based upon the $$76\mathrm{.}04$ price, what rate was the yield on the Province of Ontario strip?

b$.$ Suppose that on February $2,2017,$ the security$\text{'}$s price was $$81\mathrm{.}00.$ If an investor had

purchased it for $$76\mathrm{.}04$ a year earlier and sold it on this day, what annual rate of return would she

have earned?

c$.$ If an investor had purchased the security at market on February $2,2017,$ and held it until

matured, what annual rate of return would she have earned?