Linda Clark received $$175,000$ from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's behalf:

a$.$ Common stock was purchased at a cost of $$95,000.$ The stock paid no dividends, but it was sold for $$160,000$ at the end of three years.

b$.$ Preferred stock was purchased at its par value of $$30,000.$ The stock paid a $6\%$ dividend $($based on par value$)$ each year for three years. At the end of three years, the stock was sold for $$27,000.$

c$.$ Bonds were purchased at a cost of $$50,000.$ The bonds paid annual interest of $$6,000.$ After three years, the bonds were sold for $$52,700.$

The securities were all sold at the end of three years so that Linda would have funds available to open a new business venture. The broker stated that the investments had earned more than a $16\%$ return, and he gave Linda the following computations to support his statement:

Common stock:

Gain on sal$($$$160,000-$$$95,000)$

$$65,000$

Preferred stock:

Dividends paid years

EXHIBIT $12$B$-2$

Present Value of an Annuity of $$1$ in Arrears; $\frac{1}{r}(1-(\frac{1}{(1+r{)}^{{?}^{{?}^{?}}}}n))$