Sasha owns two investments, A and B, thathave a combined total value of 41,800dollars. Investment A is expected to pay24,700 dollars in 3 year(s) from today andhas an expected return of 3.64 percent peryear. Investment B is expected to pay 31,827in 4 years from today and has an expectedreturn of R per year. What is R, the expectedannual return for investment B? (Answer asan annual rate in decimal format so that12.34% would be entered as 0.1234 and0.98% would be entered as 0.0098.)

The time value of money is a method to calculate the present value and future value of an…

Answered: What is R, the expected

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What is R, the expected

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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You own two investments, A and B, that have a combined total value of $34,300.00. Investment A is expected to pay $860.00 per year forever; its next paymentis expected in 1 year; and its expected return is 6.09 percent per year. Investment B is also expected to make annual payments forever and make its next payment in 1 year. Investment B's next payment is expected to be $961.00 and all subsequent payments are expected to grow by 0.58 percent per year forever. What is the annual expected return for investment B? O 5.34% (plus or minus 3 bps) O 3.38% (plus or minus 3 bps) O 4.76% (plus or minus 3 bps) O 2.80% (plus or minus 3 bps) O none of the answers are within 3 bps of the correct answer
John has an investment opportunity that promises to pay him $16,000 in four years. Suppose the opportunity requires John to invest $13,200 today. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What is the interest rate John would earn on this investment? (Round your interest rate to the nearest whole percentage.) Solve for i Present Value: n = i = Future Value:
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You have just received a windfall from an investment you made in a friend's business. She will be paying you $32,711 at the end of this year, $65,422 at the end of next year, and $98,133 at the end of the year after that (three years from today). The interest rate is 11.2% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?
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Kevin Morales invests $7,302.63 now for a series of $1,500 annual returns beginning one year from now. Kevin will earn a return of 10% on the initial investment. How many annual payments of $1,500 will Kevin receive?
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