Kirk Van Houten, who has been married for 24 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring will be $10,000 in 6 years. Kirk currently has $4,515 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the ring? You are considering investing in a security that will pay you $3,000 in 32 years. b. Assume these investments sell for $1,315 in return for which you receive $3,000 in 32 years. What is the rate of return investors earn on this investment if they buy it for $1,315?
Kirk Van Houten, who has been married for 24 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring will be $10,000 in 6 years. Kirk currently has $4,515 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the ring? You are considering investing in a security that will pay you $3,000 in 32 years. b. Assume these investments sell for $1,315 in return for which you receive $3,000 in 32 years. What is the rate of return investors earn on this investment if they buy it for $1,315?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Kirk Van Houten, who has been married for 24 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring will be $10,000 in 6 years. Kirk currently has $4,515 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the ring?
You are considering investing in a security that will pay you $3,000 in 32 years.
b. Assume these investments sell for $1,315 in return for which you receive $3,000 in 32 years. What is the rate of return investors earn on this investment if they buy it for $1,315?
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