Suppose you have an investment opportunity that requires a $5,000 investment today and will pay $8,000 in six years. What is the annual rate of return of this investment?Single choice
A
7.6 percent
B
8.15 percent
C
10.8 percent
D
30 percent
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Question text[Total: 8 marks] Answer the following questions by filling in the blanks. Don't use any spaces, commas or "$" signs. Give answers as fractions using the forward slash (e.g. 1/2 or 3/4) if the answer is not an integer. Do NOT use brackets unless specified. Use - for any negatives. [Total: 1+2+2+1 = 6 marks] Lin’s father will retire soon and intends to invest $500 000 in one of the following options for 25 years. a. How many monthly payments would Lin’s father receive over 25 years? (1 mark) Answer 1 Question 8[input] b. What monthly payment will Lin’s father receive if he invests in the annuity? (2 marks)Please fill in the values you have entered into the Finance Solver to find your answer.All money values should be given correct to 2 decimal places unless otherwise instructed. [table] N | I (%) | PV | PMT | FV | P/Y | C/Y Answer 2 Question 8 | Answer 3 Question 8 | Answer 4 Question 8 | Answer 5 Question 8 | Answer 6 Question 8 | Answer 7 Question 8 | Answer 8 Question 8 [/table] Monthly payment , correct to 2 decimal places is $Answer 9 Question 8[input] c. What monthly payment will Lin’s father receive if he invests in the perpetuity? (2 marks)Find your answer by completing the following table. [table] N | I (%) | PV | PMT | FV | P/Y | C/Y Answer 10 Question 8 | Answer 11 Question 8 | Answer 12 Question 8 | Answer 13 Question 8 | Answer 14 Question 8 | Answer 15 Question 8 | Answer 16 Question 8 [/table] Monthly payment $Answer 17 Question 8[input] d. How much interest will Lin’s father earn over 25 years, if he chooses the perpetuity? (1 mark)Interest is $Answer 18 Question 8[input]
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A scholarship will be set up to provide an annual prize of $400 to the best mathematics student in a school. The scholarship is paid for by investing an amount of money into a perpetuity, paying interest of 3.4% per annum, compounding annually. The amount that needs to be invested to provide this scholarship is closest to:
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