Question

den yedt lore his 14.20 percent per year, and its next dividend is expected in 1 year. Investment A has an expected return of X and is expected to pay $76.00 per year for a finite number of years such that its first annual payment is expected later today and its last annual payment is expected in 7 years from today. What is X, the expected return for investment A? a. 13.72% (plus or minus .03 percentage points) b. 17.03% (plus or minus .03 percentage points) c. 12.29% (plus or minus .03 percentage points) d. 9.69% (plus or minus .03 percentage points) e. None of the above is within .03 percentage points of the correct answer QUESTION 5 Drew currently has nothing saved for his retirement, which will start in 4 years from today. Drew wants to receive $74,000 each year for 7 years during retirement. The first of these 7 payments will be received in 4 years from today. Drew can earn a return of 6.2 percent per year in his account. How much does Drew need to save each year for 4 years to have exactly enough to meet his retirement goal if he makes his first annual contribution to savings today and all savings contributions are equal? a. $72,474 (plus or minus $ 10) b. $93,485 (plus or minus $10) c. $88,027 (plus or minus $10) d. $99,281 (plus or minus $10) e. None of the above is within $10 of the correct answer QUESTION 6 Rico has one share of stock and one bond issued by the Island Adventure Company. The total value of the two securities is $1,080. The bond Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Close Wind

number five

Answer 1

Particulars		Annuity payment	Total
Required payments		$                  74,000.00
× present value annuity factor		5.542915
Fund amount required		$                410,175.72	$      410,175.72
× annuity required PMT factor (4 payments)			$0.2279143
Annual payment required			$              93,485

Answer is 93,485

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