What is the effective annual rate of return

Assignment Help Financial Management
Reference no: EM131066343

When a professor was working on his phd, he was being paid to do research. the university forced him to make monthly deposits to a retirement program. after finishing his phd 10 years ago, he stopped making the monthly deposits and completely forgot about the account. The retirement rogram found his address and sent him a statement, indicating a current balance of $4,351.86. the statement indicates a personal rate of return of 1% per quarter. A) what is the effective annual rate of return? B) how much money was in the account when the professor finished his Ph.D, assumming the rate of return was constant the entire time.

Reference no: EM131066343

Questions Cloud

Give price and output level of international dynamos product : Give the price and output level of international dynamo's product. Based on your answer to part a, what is international dynamo's profit?
Find a peer reviewed article about gang behavior : Find a peer reviewed article about gang behavior. It must be in APA format with a minimum of 4 pages not including the title page and reference page. You must write in detail all of the different aspects of the article such as who are the particip..
Equity of cost of capital : Jumbuck Exploration has a current stock price of $2.25 and is expected to sell for $2.36 in one year’s time, immediately after it pays a dividend of $0.20. Which of the following is closest to Jumbuck Exploration equity of cost of capital.
Basic rules of assignments : 1. Discuss whether or not the assignment is valid. 2. Analyze whether or not the rights can be assigned or if they are prohibited under the basic rules of assignments
What is the effective annual rate of return : When a professor was working on his phd, he was being paid to do research. the university forced him to make monthly deposits to a retirement program. after finishing his phd 10 years ago, he stopped making the monthly deposits and completely forgot ..
Determine the magnitude and coordinate direction angle of f : determine the magnitude and coordinate direction angle of f
Define positive and negative punishment : "Define positive and negative punishment, and give an example of each. Explain the rules for implementing punishment."
Economy probability of state of economy portfolio return : Consider the following information: State of Economy Probability of State of Economy Portfolio Return If State Occurs Recession .29 − .14 Boom .71 .24 Calculate the expected return.
Calculate the expected return for each stock : Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Recession .15 .06 − .10 Normal .56 .09 .19 Boom .29 .14 .36 Calculate the expected return for each stock.

Reviews

Write a Review

 

Financial Management Questions & Answers

  Calculate the total relevant cost to make or buy timer units

(Part Level Submission) Henry Horticultural, Ltd., is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,520 timers, the company has..

  What does it suggest regarding the bank''s risk exposure

Interpret the following earnings at risk data. What does it suggest regarding the bank's risk exposure? Earnings- at- Risk Interest Rate Change (%) 1 Year 2 Years + 1% shock + 2.4% + 4.9% - 1% shock - 1.7% - 5.5% - 1% yield curve inversion + 1.1% - 2..

  What is the expected risk- free rate of return

What is the expected risk- free rate of return if asset X, with a beta of 1.5, has an expected return of 20 percent, and the expected market return is 15 percent? Can please explain step by step how to solve this problem.

  Annual income is necessary to maintain the purchasing power

If the rate of inflation is 3 percent, goods and services cost that $100 will cost how much at their retirement? How much annual income is necessary to maintain the purchasing power of their $100,000 current income?

  Depreciated using straight-line depreciation to zero book

You are working on a bid to build two apartment buildings a year for the next three years. This project requires the purchase of $1,089,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the project's..

  Target capital structure

Patton Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8% and its marginal tax rate is 40%. The current stock price is P0 = $35.00. The last dividend was D0 ..

  Extend credit to customers with high probability of default

A firm with ______ profit margin should extend credit to customers with a high probability of default.

  Calculate the breakeven price from the information

Calculate the breakeven price from the following information.

  What was the approximate inflation rate

Your investments increased in value by 11.1 percent last year but your purchasing power increased by only 8.4 percent. What was the approximate inflation rate?

  How to calculate the average market price

How to calculate the average market price? Anoi Inc. is about to announce that it will expect to experience rapid growth for the near future with dividends growing at 27% for the next two years, 17% for the following two years, and then its current n..

  How much is in the IRA when Bob retires

Bob makes his first $400 deposit into an IRA earning 8.1% compounded annually on his 24th birthday and his last $400 deposit on his 43rd birthday (20 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 8.1% int..

  What are arithmetic-geometric average returns for stock

What are the arithmetic and geometric average returns for a stock with annual returns of 8 percent, 9 percent, –7 percent, and 16 percent? List the arithmetic answer first.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd