Mike withdrew $1,180 from a savings account and invested in common stock. At the end of 5 years, Mike sold the stock for $1,387. In the savings account he would have received an interest rate of 4%, compounded quarterly. He would like to compute a comparable interest rate on his common stock investment.

a) Draw a cash flow diagram for the stock investment

.b) What effective annual interest rate did he receive from the stock investment?

c) Based on quarterly compounding, what nominal annual interest rate did he receive on his investment in stock?