Question

Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of Rust Bucket Motor, offered some securities for sale to the public on March 28, 2005. Under the terms of the deal, RBMCC promised to repay the owner of one of these securities $80520 on March 28, 2038, but investors would receive nothing until then. Investors paid RBMCC $24551 for each of these securities; so they gave up $24551 on March 28, 2005, for the promise of a $80520 payment in 2038. Suppose that, on March 28, 2018, this security’s price is $50915. If an investor had purchased it for $24551 at the offering and sold it on this day, what annual rate of return would she have earned? (round 2 decimal places)

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE