P5-53 Rate of return and investment choice Clare Jaccard has $5,000 to invest. Because she is only 25 years old, she is not concerned about the length of the investment's life. What she is sensitive to is the rate of return she will earn on the investment. With the help of her financial advisor, Clare has isolated four equally risky investments, each providing a single cash flow at the end of its life, as shown in the following table. All the investments require an initial $5,000 payment. Future cash inflow Investment life (years) Investment A B 6 15 $ 8,400 15,900 7,600 13,000 C 4 D 10 a. Calculate, to the nearest 1%, the average annual rate of return on each of the four investments available to Clare. b. Which investment would you recommend to Clare, given her goal of maximizing the rate of return? P5-48 Loan amortization schedule Joan Messineo borrowed $45,000 at a 4% annual rate of interest that she must repay over 3 years. The loan is amortized into three equal, end-of-year payments. a. Calculate the end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal break- down of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time