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You have just read an advertisement stating, Pay us $100 per year for 5 years (5 payments in total, starting in one year) and we
You have just read an advertisement stating, "Pay us $100 per year for 5 years (5 payments in total, starting in one year) and we will pay you S100 per year forever, starting in six years from today". If the present value of what you pay and what you get in return is the same, what is the implicit annual rate of return? 7.18% 8.01% 9.05% 10.41% 12.25% 14.87%
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