Question
(Related to Checkpoint 5.6) (Solving for i) You are considering investing in a security that will pay you $5,000 in 28 years. a.If the appropriate
(Related to Checkpoint 5.6) (Solving for i) You are considering investing in a security that will pay you $5,000 in 28 years. a.If the appropriate discount rate is 12 percent, what is the present value of this investment? b.Assume these investments sell for $2,477 in return for which you receive $5,000 in 28 years. What is the rate of return investors earn on this investment if they buy it for $2,477? a.If the appropriate discount rate is 12 percent, the present value of this investment is $nothing. (Round to the nearest cent.) B. What is the rate of return investors earn on this investment if they buy it for $2,477?
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