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QUESTION 6 Suppose you save $14,000 per year in an ordinary annuity promising you an interest rate of i=4.25% compounded one per year. How much
QUESTION 6 Suppose you save $14,000 per year in an ordinary annuity promising you an interest rate of i=4.25% compounded one per year. How much will you have after 35 years? QUESTION 7 You would like to develop an office building. Your analysts forecast that it will cost you $2,000,000 immediately (time () and $500,000 in one year (time 1). They believe you can sell the building for $3,000,000 in two years (time 2). If your discount rate is i=11.0%, what is the internal rate of return for this investment? QUESTION 8 An investment gives you a 16.75% nominal return over 1 year. There was 2.5% inflation over that year. What was your exact real return? (don't use the Fisher equation)
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