Question

1 Quita wants to invest $500 at the end of every month in a mutual fund. She will be receiving $35,000 at the end of 5 years. If the interest is compounded monthly, what is the annual rate of return earned on the investment?

Group of answer choices

0.5%

5.0%

6.1%

5.9%

2

Lexi wants to purchase a new field tractor, which would cost $30,000. She has $6,000 to invest today in an account that pays 6% compounded annually. How long will it take him to have enough money to make the down payment?

Group of answer choices

4.5 years

34.6 years

27.6 years

4.3 years

Answer 1

1)
Annual rate of return	=rate(nper,pmt,pv,fv)*12
			= 6.1%
Where,
nper	=	5*12	=	60
pmt			=	$      -500
pv			=	0
fv			=	$ 35,000
2)
Number of period	=nper(rate,pmt,pv,fv)
		= 27.6 Years
Where,
rate	=	6%
pmt	=	0
pv	=	$        -6,000
fv	=	$       30,000