Question

Please help by providing explanation/step by step processes for solutions. Thank you!

1. A stock broker offers you an investment that is expected to quadruple your money in 6 years.

The exact annualized rate of return you are being offered on the investment is closest to: ______

2. You are buying a new home that costs $305,747 using a 30-year fixed rate loan at an interest rate of 5.9% with monthly payments.

The monthly loan payment is closest to: _______

3. You invest $6,080 in shares of General Electric (GE). You expect GE stock to earn an annual return of 12% per year.

The number of years it will take for the investment to grow to a value of $36,249 is closest to: _______

4. An investor is evaluating an investment that pays the following streams of cash flows:

• $25,992 in one year;
• $32,002 in two years;
• $49,152 in three years;
• $67,741 in four years;

At an interest rate of 5%, the present value of the stream of cash flows is closest to: _______

Answer 1

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- 2x Σ AutoSum : A Fill 2 Sort & m Find & 2 Clear Filter Editing Select EH EL EJ PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Calibri 11AA = = = Dr Wrap Text General Ea Copy Paste B I U Format Painter B- A Merge & Center - $ -% Conditional Format . Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells DY26 DU DV DW DXDYDZ EA EB ECEDEE EF EG 25 | 26 QUADRUPLE 4 TIMES 27 28 1 PV= 100 ASSUME 29 FV 400 ASSUME 30 YEARS 31 ANS RATE OF RETURN 25.99% (=RATE(DX30,,-DX28,DX29)] 32 33 2 LOAN 305747 34 RATE 5.90% 35 YEARS 30 36 MONTHLY RATE 0.4916667% 37 NO OF MONTHS 360 38 ANS PMT 1813.50 [=PMT(DX36,DX37,-DX33)] 39 3 PV 6080 41 36249 42 RATE 12% 43 ANS NO OF YEARS 15.75 (=NPER(DX42,,-DX40,DX41)] 44 45 pv, fv, annuity CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA pva s2 Red ferences ELEB 40 53 STATE 56 57 BOI 120% | 1 * * 90 ENG 30-10-2019

- 2x Σ AutoSum : A Fill 2 m Sort & Find & 2 Clear Filter Editing Select EG EH EL EJ 45 46 PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Calibri 11 A A = = = V Wrap Text General Ea Copy Paste BIU - D A Merge & Center - $ Format Painter % , :.: Formatting as Table Styles Clipboard Font Alignment Number Styles Cells DU56 DUDV DW DXDYDZEA EB EC ED EEEF 44 PV FACTOR PV OF YEAR CF AT 5% CF 47 A B A *B 48 1 25992 0.952381 24754.29 49 2 32002 0.907029 29026.76 50 3 49152 0.863838 42459.35 51 4 67741 0.822702 55730.69 52 ANS PRESENT VALUE = 151971.08 53 54 55 56 57 58 59 60 61 62 63 64 p CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA pva 52 53 v, fv, annuity ferences STATE56 57 BOU 120% Rea -_- ELEB * * OENG 30-10-2019