How to get following answers right using equations and calculator (no excel) Ans

Question

How to get following answers right using equations and calculator (no excel)

Ans 10. B

11. B

Your neighbor offers you an investment opportunity which will pay a single lump sum of $2.000 five years from today. The investment requires a single payment of $1,500 today. What is the annual rate of return on this investment? 5.71% 5.92% 6.18% 6.67% 33.33% Kerri James is considering the purchase of a car. She wants to buy the new VW Beetle, which will cost her $17,600. She will finance 90% of the purchase price (i.e., make a 10% down payment) at an interest rate of 5.9 percent, with monthly payments over three years. How much money will she still owe on the loan at the end of one year (to the nearest dollar)? $13,560 $10.868 $12,075 $15.704 $17.152

Explanation / Answer

10)

Annual rate of return:

= ($2,000÷$1,500)^(1÷5)-1

= 5.92%

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