Question

QUESTION 6

1. Bob has been investing $5,500 in stock at the end of every year for the past 13 years. If the account is currently worth $125,700, what was his annual return on this investment?

   		10.21%
   		8.93%
   		8.25%
   		8.49%
   		9.93%

2. QUESTION 5

3. Fancy Cat Products has a project that will cost $260,500 today and will generate monthly cash flows of $5,485 for the next 70 months. What is the rate of return of this project when expressed as an APR?

   		13.05%
   		14.14%
   		16.16%
   		12.66%
   		14.44%

Answer 1

Formulas Used:-

Q.6	Annual deposites	5500
	Tenure(in years)	13
	Current Value	125700
	Annual return	=RATE(C3,-C2,0,C4)
Q.7	Project Cost	260500
	Monthly Cashflow	5485
	No of months	70
	APR	=RATE(C10,C9,-C8)*12

Hence for Q.6 correct answer is= 8.93%

Q.7 correct answer is = 14.14%