Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $$22,000$ for $900$ shares of Malti Company's common stock. She received a cash dividend of $$684$ on the stock at the end of each year for three years. At the end of three years, she sold the stock for $$22,000.$ Kathy would like to earn a return of at least $9$$ on all of her investments. She is not sure whether the Maiti Company stock provides a $9\%$ return and would like some help with the necessary computations.

Click here to view Exhibit $148-1$ and Exhibit $148-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

Compute the net present value Kathy earned on her investment in Malti Company stock.

Did the Malti Company stock provide a $9\%$ return?

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