Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next 4 years.
Following is a table for the present value of $1 at compound interest:
Year
1
2
3
4
12%
0.943
0.909
0.893
0.870
0.890
0.826 0.797 0.756
0.840
0.751 0.712 0.658
0.792
0.683
0.636
0.572
0.747 0.621 0.567
0.497
Following is a table for the present value of an annuity of $1 at compound interest:
Year
6%
10%
12%
15%
1
0.943 0.909 0.893
0.870
2
1.833
1.736
1.690
1.626
3
2.673
2.487 2.402
2.283
4
3.465
3.170 3.037 2.855
4.212
3.791
3.605 3.353
5
5
6%
10%
%
15%
What is the investment's internal rate of return?
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