Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Solving for i) You are considering investing in a security that will pay you $2,000 in 35 years. If the appropriate discount rate is 11

image text in transcribed

(Solving for i) You are considering investing in a security that will pay you $2,000 in 35 years. If the appropriate discount rate is 11 percent, what is the present value of this investment? Assume these investments sell for $485 in return for which you receive $2,000 in 35 years. What is the rate of return investors earn on this investment if they buy it for $485? If the appropriate discount rate is 11 percent, the present value of this investment is $51.8. (Round to the nearest cent.) The rate of return investors can earn on this investment if they buy it for $485 is %. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of European Financial Markets And Institutions

Authors: Xavier Freixas, Philipp Hartmann, Colin Mayer

1st Edition

0199229953, 978-0199229956

More Books

Students also viewed these Finance questions

Question

What is Centrifugation?

Answered: 1 week ago

Question

To find integral of ?a 2 - x 2

Answered: 1 week ago

Question

To find integral of e 3x sin4x

Answered: 1 week ago

Question

To find the integral of 3x/(x - 1)(x - 2)(x - 3)

Answered: 1 week ago

Question

What are Fatty acids?

Answered: 1 week ago

Question

Describe the job youd like to be doing five years from now.

Answered: 1 week ago

Question

So what disadvantages have you witnessed? (specific)

Answered: 1 week ago